Davide Campari - Milano - AGM 27 March 2020
In item 3.1, shareholders are called to a binding vote on the remuneration policy. Overall remuneration amounts are reasonable: the CEO's fixed remuneration is 99% of the median at European peers, and 88% of the median at large Italian companies. However, we strongly regret that the stock option plan (subject to a vote in item 4) is not based on any performance conditions, and the maximum annual bonus (180% of the base salary) exceeds our voting policy limit of 150% of the fixed remuneration. Therefore, we recommend opposition.
In item 3.2, shareholders are called to an annual advisory vote on the remuneration paid. Due to our concerns over the executives' variable remuneration, and taking into account that the Company did not disclose any details regarding the level of achievement of short-term targets used to calculate the 2019 bonus, we recommend opposition.
In item 5, we also recommend to oppose the authorization to purchase treasury shares, because the maximum number of shares to be repurchased under the authorization (20% of the share capital) and the maximum repurchase price (125% of the share market price) substantially exceed the voting policy limits of ECGS.
In item 6 (EGM), the Board proposes to transfer the Company's registered office to the Netherlands, in order to allow the allocation of an increased number of voting rights to "loyal shareholders": 5 votes per ordinary share held in the "Loyalty Register" for 5 years, and 10 votes per share after 10 years. Campari has adopted the double-voting shares' structure in 2015, and it is controlled by the executive Chairman with 64.9% of voting rights and 51.0% of shares. In our opinion, the possibility to increase the number of voting rights per share only benefits controlling and major shareholders, who will be able to maintain the control of the Company even reducing their investment. Therefore, we recommend opposition.
Davide Campari-Milano is engaged in manufacturing spirits industry with an extensive product portfolio in three business lines: spirits, which includes internationally brands such as Appleton, Campari, Carolans, SKYY vodka and Wild Turkey, as well as brand in local markets including Aperol, Cabo Wabo, Cynar, Frangelico, GlenGrant, Ouzo 12, X-Rated Fusion Liqueur, Zedda Piras, and Brazilian brands Dreher, among others; wines, which main regional brands are Liebfraumilch, Mondoro, Odessa, Riccadonna, Sella&Mosca and Teruzzi&Puthod; and soft drinks, which covers the extended ranges of Crodino and Lemonsoda. Co. operates in 190 countries with registred positions in Europe and the Americas.
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