Expert Corporate Governance Service (ECGS)
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Proxy Report - 13/04/2018

We have serious concerns over the CNH Industrial's corporate governance, as it does not respect the "one share – one vote" principle: all shareholders that have registered their shares for more than 3 years are entitled to receive an additional voting right. The major shareholder Exor (26.9% of the share capital and 41.7% of votes) holds 92.9% of special voting rights.

Concerns also arise over the composition of the Board, as it is chaired by the executive Director Mr. Sergio Marchionne, although the Bylaws provide that "the chairperson of the Board of Directors shall be a non-executive Director", and it does not include a majority of independent Directors (36% as per our guidelines and 73% according to the Company, which does not consider previous positions at Group companies in the tenure of Directors).

Due to the above mentioned concerns, we recommend that shareholders oppose the discharge of Board members (item 2.f), the re-appointment of the executive Chairman (item 3.a) and non-independent non-executive Directors Ms Ms. Suzanne Heywood (item 3.d), Mr. Léo W. Houle (item 3.e), Mr. Peter Kalantzis (item 3.f), Mr. John B. Lanaway (item 3.g) and Mr. Jacques Theurillat (item 3.k).

We also recommend that shareholders oppose the authorization to increase the share capital by more than 30% (item 5.a), with the authority to limit or exclude pre-emptive rights (item 5.b), as it exceeds our voting policy limit of 10% of the share capital on share capital increases without pre-emptive rights.

In item 5.c, we also recommend that shareholders oppose the authorization to issue special voting shares, as it represents a deviation from the "one share – one vote" principle, significantly affecting the basic principle of the equality of treatment of shareholders in the long term.

Cnh Industrial

CNH Industrial is a holding company. Through its subsidiaries, Co. is engaged in the design, production, marketing, sale and financing of agricultural and construction equipment, trucks, commercial vehicles, buses and specialty vehicles for firefighting, defense and other uses, as well as engines, transmissions and axles for those vehicles and engines for marine and power generation applications. Co. divides its business activities into three operating segments: Agricultural Equipment, Construction Equipment, Commercial Vehicles, Powertrain, and Financial Services.


Founded in 1995, Proxinvest is an independent proxy firm supporting the engagement and proxy analysis processes of investors. Proxinvest mission is to analyse corporate governance practices and resolutions proposed at general meetings of listed firms.

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Expert Corporate Governance Service (ECGS)

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