Investors seeking VW reform may be disappointed at AGM
By Andreas Cremer, Edward Taylor and Georgina Prodhan
FRANKFURT (Reuters) - Investors hungry for reform at Volkswagen VOWG_p.DE after the diesel emissions test-cheating scandal may be disappointed at the carmaker's annual shareholder meeting on Wednesday.
Galvanized by hedge fund TCI, which launched an attack on Volkswagen's (VW) corporate governance last month, some shareholders felt that changes to the company's arcane structure were inevitable.
There were also signs of discontent among major shareholders with some members of the Porsche-Piech family indicating they might dispute the paying of a dividend at the meeting. But that appeared to have been resolved on Thursday after Volkswagen presented a 10-year strategy plan.
After decades in which Europe's biggest carmaker appeared to be run in the interests of the Porsche-Piech clan that controls the company, Volkswagen's more than half a million employees and its home state of Lower Saxony, the balance of power seemed set to tip towards institutional shareholders.
"VW can only develop further if the conflict of interest between unions, Lower Saxony, the ruling families and independent shareholders is resolved," said Ingo Speich, a fund manager at Union Investment which holds about 0.6 percent of VW preference shares.
A vote by the Porsche-Piech family would have begun to weaken the special status of Lower Saxony by giving all shareholders equal voting rights if the dividend were scrapped for two years in a row.
That would have eliminated the veto rights of Lower Saxony, with its interests in preserving local jobs, over major strategic moves such as shutting plants.
But the family closed ranks on Thursday after Volkswagen presented a strategy plan supposed to turn the company into a leader in electric vehicles and new forms of mobility such as ride-hailing and car-sharing. Continued...