Proxy Report - 13/04/2018
We have serious concerns over FCA's corporate governance, as it does not respect the one share - one vote principle, the Board does not have a majority of independent members (42% as per our guidelines and 67% according to the Company, which considers executive members of business partners as independent Directors), the Chairman holds executive powers, is a representative of the controlling shareholder and he chairs the Committee responsible for selecting nominees to the Board. Furthermore, since 2017 FCA has been involved in a lawsuit concerning alleged violations with respect to the emissions control technology employed by the Company in the US, and in May 2017 the European Commission launched an infringement procedure against Italy for failure to fulfil its obligations under EU vehicle type-approval legislation with regards to FCA. For all the above mentioned concerns, we recommend that shareholders oppose the discharge of Board members (item 2.f).
Due to our serious concerns over the composition of the Board, we recommend that shareholders oppose the reappointment of the executive Chairman, representative of the controlling shareholder and Chairman of the Governance & Sustainability Committee, Mr. John Elkann (item 3.a).
In item 4.b, the Board proposes to appoint Mr. John Abbott as non-executive Director. Independent according to the Company, Mr. Abbott is a member of the Executive Committee of Royal Dutch Shell, which is a business partner of FCA's sister company Ferrari (spun off from FCA in 2016). As Mr. Abbott is not independent according to our guidelines, and considering the lack of independent representation on the Board, we recommend opposition.
We also recommend that shareholders oppose the reappointment of Mr. Michelangelo Volpi (item 4.h) and Mr. Ermenegildo Zegna (item 4.j), who are not independent according to our guidelines as respectively member of FCA's controlling shareholder Exor and CEO of a business partner of FCA Group's Maserati.
Fiat Chrysler Automobiles is a holding company. Through its subsidiaries, Co. is an international automotive group engaged in designing, engineering, manufacturing, distributing and selling vehicles, components and production systems. Co. has operations in approx. 40 countries and sells its vehicles directly or through distributors and dealers in more than 140 countries. Co. designs, engineers, manufactures, distributes and sells vehicles for the mass market under the Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia and Ram brands and the SRT performance vehicle designation.
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