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"SAY ON PAY" RESOLUTION AT RENAULT

As shareholders for more than seven years in Renault, the Board of Directors of the sicav (investment fund) noted that the information given to us on the remuneration paid to Mr Carlos Ghosn was not complete, which is a serious concern to us and our investors. Indeed, the remuneration which was paid to the Renault CEO by Nissan Motors for the 2009 financial year was not mentioned in the section of the management report on the consolidated accounts of the company’s reference document.

In view of the importance of this issue, it seems vital to us that all remuneration which is paid to the Chief Executive within the scope of the Renault-Nissan alliance be clearly disclosed to the shareholders of these two companies.

Given that Renault is consolidating the accounts with Nissan through the equity method, we wonder why Renault did not notify shareholders of Mr Ghosn’s remuneration at Nissan, as a piece of information that shareholders need in order to consolidate the accounts, within the management report of the consolidated accounts provided for in Article L-233-16 of the French Commercial Code.

In fact, the irreplaceable usefulness of consolidated accounts is undeniable. For shareholders, the information that they contain is often more critical than that provided by the statutory financial statements of the parent company. Noting this, the legislature wished to respond to the law on new economic regulations of 15 May 2001. Consolidated accounts must from now on be approved by the parent company’s General Meeting of Shareholders: "The General Meeting deliberates and decides on all matters relating to the annual accounts and, where appropriate, the consolidated accounts for the preceding financial year".

Furthermore, the shareholder has a right to be kept informed, in order to be able to check on the company’s business affairs and overall corporate governance. This right to have complete information must ensure that the investor has all the elements needed to be in a position to approve the consolidated accounts.
With Renault shareholders deeming it legitimate to obtain all information required for the consolidation of the accounts in the Group's management report, we therefore ask the Board of Directors of Renault, out of a concern for transparency and sound communication, to notify the General Meeting of the remuneration granted by Nissan to Mr Carlos Ghosn in his role as CEO of Renault, for the financial year ended on 31 December 2009.

Furthermore, the Proxy Active Investors SICAV asks the Board of Directors of Renault, as a consolidating company, to complete the information relating to the remuneration and benefits granted by the Nissan Group to the corporate officers and directors of Renault within the management report of the Renault-Nissan Alliance, starting from the 2011 financial year.

SEPARATION OF POWERS, REMUNERATION, TRANSPARENCY, VOTE FOR NON-RESIDENTS

La France occupe la troisième position des pays européens pour la participation des actionnaires.
Crédits photo: Le Figaro

As every year, we are preparing the governance improvement proposals which we put forward to the Boards of Directors of CAC 40 companies. Several issues are sensitive these days and will be at the heart of our engagement campaign with companies in 2011:

•  The separation of powers, or how to justify the fact that the same director executes and controls at the same time in very large quoted companies? The numerous examples of governance crises in the last few years have in most cases been linked to an extreme concentration of powers in the hands of the CEO. It seems to us to be essential as shareholders to require a fair division of roles between execution and control. This is even more important in the world of banking, with Société Générale for example being the only major French banking group to have returned to a CEO structure last year.

• Remuneration – or rather the CEO's remuneration structures – will once more return to the top of the agenda, given the excellent company results (particularly in the financial sector) and the variable modes of remuneration in place for directors. Nowadays, it is simply astonishing that companies do not seek to gain acceptance of directors’ remuneration through the majority vote of shareholders (and not only of the Board of Directors) in the context of regulated agreements (as is the case with severance indemnities and retirement benefits). Shareholders need to push companies to seek more legitimacy in setting the framework for such remuneration and make it subject to a vote in the General Meeting of Shareholders in order to restore a certain "affectio societatis" between companies and their shareholders.

• Transparency on remuneration is also an important issue if there is a desire for shareholders and all parties to conduct a clear analysis of remuneration structures. How is it possible to justify that in 2010, all remuneration received from the entire Renault Nissan Group by Mr Carlos Goshn is not disclosed to the shareholders of Renault; or that some additional remuneration received by Mr Levy at Publicis is not subject to shareholder vote as required by the law?

• The vote of non-resident shareholders can also be an annoyance for some directors who do not want to be too closely governed by these investors. How could one otherwise explain the fact that some companies continue to pay their dividend just after the General Meeting, knowing full well that, in order to avoid withholding tax, non-residents will already have lent their securities and will therefore not be voting!

Even as minority shareholders, we have a role to play to improve the transparency and governance of quoted companies. Please do not hesitate to support us!

PhiTrust Active Investors
Investor and Shareholder

Séparation des pouvoirs, Rémunérations, Transparence, Vote des non résidents …

La France occupe la troisième position des pays européens pour la participation des actionnaires.
Crédits photo: Le Figaro

Comme chaque année nous préparons les propositions d’amélioration de gouvernance que nous proposons aux Conseils d’administration des sociétés du CAC 40. Plusieurs sujets sont aujourd’hui  sensibles et  vont  être au cœur de notre campagne d’engagement auprès des entreprises en 2011 :
La séparation des pouvoirs, ou comment justifier dans de très grandes entreprises cotées que le même dirigeant soit à la fois celui qui exécute st qui contrôle ? Les nombreux exemples de crise de gouvernance depuis quelques années ont pour la plupart  été liées à une extrême concentration des pouvoirs dans la main du PDG.  Il nous parait fondamental de demander en tant qu’actionnaire une juste répartition des rôles entre l’exécution et le contrôle. Cela est d’autant plus important dans le monde bancaire, la Société Générale étant par exemple la seule grande banque française à être revenue l’année dernière à une structure de PDG.

La rémunération ou plutôt les structures de rémunération des PDG vont une fois de plus revenir sur le devant de la scène compte tenu des excellents résultats des entreprises (notamment du secteur financier) et des modes de rémunération variables pour les dirigeants. Nous ne pouvons aujourd’hui que nous étonner que les entreprises ne cherchent pas à  faire accepter par le plus grand nombre les rémunérations des dirigeants en les faisant voter par leurs actionnaires (et non seulement par le Conseil d’Administration) dans le cadre des conventions réglementées (comme le sont les indemnités de départ et les éléments de retraite). Il est nécessaire que les actionnaires poussent les entreprises à chercher plus de légitimité en encadrant ces rémunérations et les faisant voter en Assemblée Générale pour restaure une certaine « affectio societatis » entre les entreprises et leurs actionnaires.

La transparence sur les rémunérations est aussi un sujet important si l’on souhaite revenir à une analyse sereine des structures de rémunération par les actionnaires et l’ensemble des parties. Comment justifier qu’en 2010 l’ensemble des rémunérations perçues dans l’ensemble du groupe Renault Nissan par Mr Carlos Goshn  ne soit pas communiqué aux actionnaires de Renault ou que certaines rémunérations complémentaires de Mr Levy chez Publicis ne soit pas soumiis au vote des actionnaires comme l’exige la loi ? 

Le vote des actionnaires non résidents peut aussi être une gêne pour certains  dirigeants qui ne veulent pas être trop soumis à ces investisseurs. Car comment expliquer sinon que certaines entreprises continuent à payer leur dividende juste après l’Assemblée sachant pertinemment que les non résidents pour éviter une retenue à la source auront prêtés leurs titres et donc ne voteront pas !

Même minoritaires, nous avons en tant qu’actionnaire un rôle à jouer pour améliorer la transparence et la gouvernance des sociétés cotées. N’hésitez pas à nous soutenir !