Four resolutions had then received record low approval rates concerning a severance indemnity regime and the renewal of three bankers or cross-directors top brass candidates, Mrs Lauvergeon and MM. Pébereau and Bouton, with each of them less than 59 % of the votes, the lowest score ever seen here for Directors approval. The reason was that French employee shareholding fund TOTAL Actionnariat France (holding about 3 % of the shares resulting in some 9.5 % of the votes at the May 15th AGM) had voted against some of TOTAL Board of Directors’ resolutions (actually not even compliant with MEDEF-AFEP rules. The TOTAL management then had decided to sue Mr. Bruno Henri - the chairman of its Supervisory Board - for not having associated the management’s representatives in the fund’s Board to the vote. Thereby Bruno Henri had enforced - rightfully in our opinion - the rules of this fund and stopped the former practice supported by TOTAL. TOTAL and its 7 representatives at the Board claim for by Bruno Henri a payment of 44 000 €…
According to the regulations of the TOTAL Actionnariat France fund : « The Supervisory Board exercises the voting rights attached to securities in the fund’s assets and decides to deliver these to public tender offers, and therefore appoints one or several proxies to represent the Fund at the General Meetings of issuing companies, management representatives not taking part in the voting. »
TOTAL supported its former interpretation which allowed TOTAL management to vote on its on resolutions and had hired the best lawyers to sue the uninsured employee shareholder representative chairing the fund's board. The civil court just proved in June 2010 him right though, validating the vote of the only representatives of employee shareholders for the TOTAL AGM.
The conflicts of interests resulting from the supervisory board composition of employee shareholding funds are detrimental to shareholders’ interests. While France as not yet transposed the 2007 European Union Directive on the exercise of certain rights of shareholders, it is more than legitimate to return to the previous French legal rules requesting that such supervisory boards comprise employee shareholders’ representatives only.
This renewed engagement of TOTAL against its shareholders and its employees by appealing from this 2010 decision should be of great concern for all investors, while employee shareholding reaches growing shares in the companies capital. The attitude of this firm generally neglecting shareholders rights as shown in the previous case of the remuneration of its non executive chairman is also typical of this most conservative end of French management circles.
Proxinvest reiterates to Mr. Bruno Henri his full sympathy and support.
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