Ferrari– AGM 16 April 2020
We have serious concerns over Ferrari's corporate governance, as it does not respect the "one vote rone share" principle, the Chairman holds executive powers and is also the Chairman of the Committee responsible for issuing proposals for appointments, and we have concerns over the poor functioning of the Board, which met only 4 times in 2019 and 3 times in 2018. Therefore, we recommend that shareholders oppose the discharge of Board members (item 2.f) and the appointment of the executive Chairman Mr. John Elkann (item 3.a).
Due to concerns over their aggregate time commitments, we also recommend shareholder to oppose the (re)appointment of independent Directors Ms. Delphine Arnault (item 3.d) and Mr. John Galantic (item 3.k).
In item 2.c, shareholders are called to an advisory vote on the 2019 Remuneration Report. Fixed remuneration of executives and non-executive Directors is reasonable, but the executives' incentive (capped at 857% of the CEO's base salary and 400% of the Chairman's salary) substantially exceeds the ECGS' voting policy limit of 300%. Furthermore, we strongly regret that 33% of the incentive does not depend on any performance conditions (restricted shares). Therefore, we recommend opposition.
Due to our concerns over the long-term incentive, and also taking into account that accelerated vesting of long-term incentives upon change of control is allowed, and clawback clauses may be applied for 2 years only, we also recommend that shareholders oppose the remuneration policy in item 5 (binding vote) and the award of 2020-2022 incentive to the executive Chairman in item 8.
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