Naturgy Energy Group - AGM 09 March 2021
In item 4, the Company proposes to approve the distribution of an additional cash dividend of €0.63 for a total of €1.44 per share (€1’395.5 million) against 2020 results. Due to the effects of the pandemic, we recommend that companies still exercise caution while making decisions about dividends to avoid liquidity and financial risks. We note that a full dividend of €1.37 was delivered for FY 2019. Taking into account the decrease in revenues (-26%) and free cash flow (-10.7%) as well as a consolidated net loss of €347 million, we suggest that the Company revises their dividend for 2020, and recommend that shareholders oppose this resolution.
In item 6, shareholders are called to a binding vote on the Remuneration Policy for the 2021-2023 period. The overall variable remuneration depends more on short- than long-term results, and the level of disclosure on some of the metrics (particularly ESG) are yet to be fully defined. We also note that the long-term incentive does not depend on multiple or relative performance indicators, only on quantitative financial indicators. Further concerns arise over the Chairman-CEO's fixed remuneration, substantially above its peers, and we regret that the clawback clause is too short (18 months). Therefore, we recommend opposition.
In item 7, shareholders are called to an advisory vote on the Remuneration Report. Taking into account our concerns over the Chairman-CEO's elevated fixed remuneration, and the structure of variable remuneration schemes, we recommend opposition.
On 25 January, Global InfraCo launched a takeover bid for 22 million Naturgy shares at €23.00 per share (for up to €5.06 billion), subject to acceptance of at least 17% of the capital. The offer price represents a premium of 19.7% on the stock price on 25 January (€19.22), of 3.7% on 26 January (€22.19) and of 10.7% at the date of this analysis (€20.77) on 17 February.
Gas Natural SDG is a gas company based in Spain. Co. and its subsidiaries are primarily engaged in the supply, transportation, distribution and commercialization of piped natural gas, as well as the activities involving exploration and developing, supply, regasification, liquefaction and storage of natural gas, and the generation and commercialization of electricity. Co. operates mainly in Spain and also outside of Spain, especially in Latin America, Puerto Rico, Italy, France and Africa (through Maghreb-Europe gas pipeline and integrated LNG projects in Algeria).
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