ENCE Energia y Celulosa - AGM 30 March 2020
In item 5a, the Board proposes the re-appointment of Mr Ignacio de Colmenares Brunet as executive Director. Mr de Colmenares holds the combined position of Chairman-CEO since 2019 and despite the presence of a Lead Independent Director, we have concerns over the insufficient independent representation on the Board (36% according to the Company and our guidelines). Therefore, we recommend that shareholders oppose.
ECGS has concerns over the aggregate time commitments of the proprietary Director Mr. Víctor Urrutia Vallejo. Mr. Urrutia holds multiple external positions, including the Chairmanship of CVNE. An attendance rate of 75% was recorded for Mr. Urrutia Vallejo for Board meetings held in 2019 without justification. Also, due to the lack independencte on the Board (36%), we recommend that shareholders oppose his re-appointment in item 5.B.
In item 7, shareholders are called to a binding vote on the 2020-2022 remuneration policy for the members of the Board of Directors. The quality of disclosure is very high, as all the terms and conditions are disclosed and long-term targets are quantified. The overall remuneration amounts are reasonable (fixed remuneration of €725,000 and variable remuneration capped at 250% of the base salary) and, in our opinion, the policy is adequately structured to align the executives' interests with the creation of sustainable value in the long term. Hence, we recommend approval.
Ence Energia Y Celulosa is engaged in the manufacture and commercialization of wood pulp and derivatives. Co. divides its activities into the following two business lines: Forest Division: Co. manages timberlands in South America and the Iberian Peninsula. Co. is involved in trading of wood, and supplies solid wood products including: plywood, sawn timber, parquet flooring and glued-edge paneling. Co. is involved in forest and environmental consulting. Pulp Division and Energy Production: Co. is engaged in the production of Eucalyptus globulus-based TCF and ECF paper pulp. Co. is also involved in the generation of electricity through biomass power producing plants.
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