EUR 1000.00 For Business Accounts Only

Inmobiliaria Colonial. – AGM 29 June 2020

In item 2.1, it is proposed to allocate the parent Company¶s net income for FY 2019 and
subsequently distribute a dividend of €0.1556 per share. Under normal circumstances,
in light of COVID-19, ECGS recommends that companies postpone decisions regarding
dividends to avoid liquidity or financial risks, however, we understand the special
circumstances applicable to SOCIMIs. We consider that the obligation to distribute
dividends in order to benefit from the special tax regime is covered by the proposition;
hence, we recommend support. Yet, in item 2.2, an extra dividend of €0.444 per share is
proposed. We consider this to be unnecessary as the Company already benefits from the
tax regime with the previous distribution and, we recommend opposition.
The Board asks for the authorisation to announce an EGM with 15 days in advance in
item 5. ECGS believes this period is too short for shareholders to duly analyse all
relevant documents and we recommend a minimum period of 21 days, ideally 30. Hence,
we recommend opposition.
Concerns arise over the lack of independence on the Board (46% according to the
Company and 31% as per ECGS guidelines). We recommend that shareholders oppose
the re-appointments of the three proprietary Directors proposed in items 6.1 to 6.3.
In item 7, it is proposed to extend the performance share plan, which was adopted by the
2014 AGM and will expire in 2021, for 2 years. In our opinion, a 2-year period is not long
enough to effectively align the interests of executives with the creation of sustainable
value in the long term. Moreover, the incentive is solely based on two financial metrics
and no qualitative targets. In item 8, shareholders are called to and advisory vote on the
2019 Directors¶Remuneration Report. Overall compensation amounts are reasonable.
But the CEO¶s variable remuneration is capped at 363%, above ECGS¶voting policy limit
of 300% base salary, and the Board reserves the power to award extraordinary bonuses
capped at 200% of the base salary in the event of significant corporate transactions.
Hence, we recommend opposition of both items.