For the third « Say On Pay » season and for the first time in France, the shareholders of a listed company, the car manufacturer Renault, rejected the remuneration of the chairman-CEO, Carlos Ghosn. His « Say On Pay » has indeed obtained only 46% of votes FOR.
Proxinvest had called shareholders to block this uncontrolled remuneration of Carlos Ghosn for reasons of lack of transparency and due to a total compensation of € 15m granted by Renault and Nissan which is excessive. Proxinvest congratulated renault shareholders and welcomes this shareholders success and this shareholder engagement should lead to major improvements from the Renault Board of Directors.
In France the vote on remuneration is only consultative according to the AFEP-MEDEF Corporate Governance code even if investors are pushing for the introduction of a binding vote on the remuneration policy, at least every three years like in the UK.
Unfortunately, the high level of criticism of the related-party agreements signed with the French State and with Nissan (opposition rate of 27% and 16% respectively) was not enough to reject the « stabilization agreements » which are very protective in terms of remuneration for Carlos Ghosn. Indeed, he is also Chairman-CEO of the Japanese Company Nissan Motors and his € 8M remuneration from Nissan is likely to be entrenched for now. (Look at the recent French Civil Employees Pension Fund reaction)
The objectives of the Say On Pay system is to encourage a fruitful dialogue between directors and their shareholders. Despite low approval rates of 64% in 2014 and 58% in 2015, renault directors never implemented a good dialogue with the shareholders. Hope the outcome of this general meeting may change behaviours. Proxinvest stands of course available for discussion with the members of Renault’s remuneration committee if they want to better understand the rationale behind Proxinvest negative voting recommendation.
Proxinvest chairman, Pierre-Henri Leroy, asked question about Carlos Ghosn remuneration, shareholder rights, agreements with French State and Nissan at Renault AGM 2016.
For more information about the renault case : Loïc Dessaint, Proxinvest CEO : +33 (0)145515043 or ldessaint (at) proxinvest.fr
Proxinvest is a voting advisory firm. Proxinvest proxy reports on each general meeting are distributed by subscription to its clients or may be ordered online at shop.proxinvest.fr sites (French version) and shop .ecgs.com (English version). Proxinvest is the managing partner of Expert Corporate Governance Service (ECGS), a unique combinaison of local proxy advisors providing voting research all over the world.
