Enagás S.A. – AGM 29 June 2020
Enagás distributed an interim dividend of €0.64 per share in December 2019. In item 3,
the Board proposes to distribute a final dividend of €0.9304 per share, for a total
aggregate of €1.5704 on 2019 results. In item 4, an extraordinary dividend of €0.0296 is
proposed, totalling €1.60 per share. The dividend is not covered by free cash flow.
Furthermore, in light of COVID-19, ECGS recommends that companies postpone
decisions regarding dividend distribution to avoid liquidity and financial risks. Hence, we
recommend that shareholders oppose both resolutions.
In item 6.2, it is proposed to amend Article 35 of the Articles of Association in order to
increase the maximum number of Directors from 15 to 16,
exceeding the limit recommended by the CNMV and ECGS. Although the proposal is
justified by the Company to increase the representation of skills on the Board, we have
serious concerns over its independence (69% according to Enagás, but 31% per our
guidelines); hence, we recommend opposition. Furthermore, we note that the three new
nominees in items 8.2 to 8.4 are not independent due to their ties with the Spanish State,
major shareholder with 5% through SEPI, proposed to be re-elected in item 8.1, is over-
represented on the Board. Therefore, we recommend that shareholders oppose the
above resolutions.
In item 10, it is proposed to increase the maximum annual limit of the remuneration of
Directors in their capacity as such to accommodate the larger Board size. As we oppose
item 6.2, we recommend that shareholders do not support this resolution either.
In item 9, the Board asks for a 5-year authorisation to acquire up to 10% of own shares
with a maximum re-purchase price of 115% stock price, exceeding ECGS guidelines.
Therefore, we recommend opposition.
Enagas is a gas transportation company based in Spain. Co. is engaged in the technical distribution and storage of gas through pipelines as well as the provision of regasification services. Co. and subsidiaries are engaged in the ownership, administration, storage, pipeline transportation, distribution flow, and sale of natural gas. As a transport company, Co. also provides gas and manages the gas infrastructures.
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