Hennes & Mauritz – AGM 7 May 2020
In general, Hennes & Mauritz ("H&M") is in compliance with the Swedish regulations relating to the organisation and procedures of the Annual General Meeting.
Under ITEMS 11.8 and 11.9 the nomination committee proposes to newly appoint Mr. Karl-Johan Persson as Member (ITEM 11.8) and Chairman (ITEM 11.9) of the board of directors. ECGS notes that Mr. Karl-Johan Persson is currently serving as CEO of H&M and questions the practice in which a current CEO becomes the Chairman of the board of directors. While this may provide continuity, it risks undermining the board's supervisory function and may inhibit an objective assessment of management and strategy as well as the initiatives of the successor CEO. Best practice dictates that companies apply a reasonable cooling-off period before making such an appointment. In ECGS'view, a former CEO should not be appointed as Chairman of the same company, unless the board of directors provides clear justifications provided that the former executive is not re-appointed as Chairman at the next available AGM. As no such justification is provided, ECGS recommends to vote OPPOSE.
Under ITEM 12 the nomination committee proposes to re-appoint Ernst & Young as the Company's external auditor. In view of the substantial amount of non-audit fees as well as the current term in office of the external auditor, ECGS recommends to vote OPPOSE.
Under ITEM 13 it is proposed to establish a(n) (external) nomination committee. ECGS notes that Mr. Stefan Persson is currently chairing the nomination committee, which is NOT in accordance with provision 2.4 of the Swedish Corporate Governance Code. Aforementioned provision stipulates that neither the company chair nor any other member of the board may chair the nomination committee. Accordingly, ECGS recommends to vote OPPOSE.
Under ITEM 14 the board of directors seeks approval of the Company's remuneration guidelines. As the proposed remuneration structure is NOT in line with its guidelines, ECGS recommends to vote OPPOSE.
Finally, ITEMS 14a, 16 and 17 are proposals made by shareholders. ECGS recommends to vote FOR ITEMS 14a and 16, but does not support ITEM 17.
H & M Hennes & Mauritz is engaged in the sale of clothing and cosmetics in Sweden and internationally. Co.'s stores offer basics, tailored classics, sportswear, and maternity clothes for women; basics, leisurewear, and seasonal fashions for men; denim and street fashions; and fashion wear for children and teenagers, as well as accessories, underwear, and shoes. Co. also provides makeup and body care products; and home fashion products, which include interior textiles for the bedroom, bathroom, living room, and kitchen. Co. has approximately 3,132 stores, including 110 franchise stores, 85 COS stores, 79 Monki stores, 21 Weekday stores, 8 & Other Stories stores and 3 Cheap Monday stores.
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