Hugo Boss – AGM 27 May 2020
General: The AGM is to be held in the form of a virtual AGM in accordance with the German Law to Mitigate the Consequences of the COVID-19 Pandemic. The physical presence of shareholders or their authorised proxies is not possible. The voting rights may therefore be exercised solely by postal vote or by granting authority to the proxies designated by the Company.
Hugo Boss is one of the leading companies in the premium segment of the global apparel market. The Company develops and sells high-quality fashion as well as accessories in the menswear and womenswear segments under the BOSS and HUGO brands. The collections cover businesswear, casual outfits, athleisurewear and eveningwear. Shoes and accessories as well as licensed products such as fragrances, eyewear and watches round off the range.
The Company has issued 70.4m shares that amount to a share capital of EUR 70.4m. As of 28 April 2020, PFC S.r.l. and Zignago Holding S.p.A., two entities controlled by the Marzotto family, held a total of 15.45% of the Company's shares. Both companies have pooled their shares by way of a shareholder agreement. Furthermore, BlackRock Inc. and UBS Group AG each held between 3% and 5% of the Company's shares.In financial year 2019, Group sales increased by 3.2% to EUR 2.9bn, EBIT decreased by 0.7% to EUR 344.5m and net income attributable to the shareholders of Hugo Boss AG decreased by 13.1% to EUR 205.2m.
On 23 March 2020, the Company announced that CEO Mark Langer will leave the Management Board by mutual consent with effect as of 30 September 2020. Mr. Langer had been the Company's CEO since 2016, before he served as CFO between 2010 and 2016. According to the Company, the Supervisory Board will now focus on the search for a successor for the CEO position.
Item 2: Against the background of the recent COVID-19 pandemic and the associated economic consequences, the Management Board and the Supervisory Board propose that the payment of a dividend be suspended, except for a minimum dividend in accordance with Section 254 (1) of the German Stock Corporation Act of EUR 0.04. In view of the recent events relating to COVID-19, ECGS is in favour of postponing decisions on the dividend, reductions or suspensions that would allow companies to avoid liquidity risks or not generate risk for their survival. The proposal reflects the focus on preserving liquidity. We recommend support.
Item 7: The Management Board and the Supervisory Board propose that the Supervisory Board remuneration shall be converted to a purely fixed remuneration and that the fixed amounts shall therefore be increased. Even though we welcome the change to a purely fixed remuneration, we are taking into account both the significant increase in expected total remuneration of 39% compared to financial year 2019 and the proposed very high remuneration level that significantly exceeds markt practice. We therefore do not consider the proposal as acceptable.
Item 8: The Management Board and the Supervisory Board propose to amend § 15 of the Company's Articles of Association in various aspects. The amendments are proposed in a bundled resolution and relate inter alia to a possible participation of Supervisory Board members in the AGM by means of video and audio transmission in certain exceptional cases. ECGS considers the personal attendance of Supervisory Board members in the AGM as best practice. As the proposed cases for an attendance by means of video and audio transmission are deemed to be too extensive and unjustified, we recommend opposition.
HUGO BOSS Group is engaged in the global apparel market. The Group, which is based in Metzingen Germany employs almost 12,500 people, generated annual sales of EUR 2.4 billion in fiscal year 2013 and is an apparel manufacturer. The Group focuses on developing and marketing high-end women's and men's fashion and accessories. With its brand including the BOSS core brand, the lines BOSS Orange, BOSS Green and the progressive brand HUGO, Co. targets different, consumer groups. The brands consists of modern business wear, evening wear and sportswear, shoes and leather accessories as well as licensed fragrances, eyewear, watches, children's fashion, home textiles and mobile accessories.
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