Salvatore Ferragamo – AGM 8 May 2020
The AGM was initially called on April 21, and postponed to May 8. The Agenda remained the same, and the only change to proposed resolutions refers to the allocation of net results (item 2). In light of the uncertainties related to the Covid-19 epidemic, the Board of Directors resolved not to distribute dividends on 2019 results (a dividend of €0.34 per share was initially proposed). The Board will consider proposing a dividend distribution by the end of this year, taking into account the evolution of the economic situation. We recommend approval.
In item 3, the AGM is called to appoint the Board of Statutory Auditors, on slates of nominees submitted by shareholders holding, even jointly, at least 1.0% of the share capital. In sub-item 3.2, a group of institutional investors proposes to reappoint Mr. Andrea Balelli as Chairman of the Board of Statutory Auditors. Mr. Balelli is independent from the Company and its shareholders, and we have not identified any specific concerns over his re-appointment. Therefore, we recommend that shareholders support the slate submitted by the institutional investors.
In item 6, it is proposed to authorize the Company to repurchase treasury shares representing up to 1.0% of the share capital, at a maximum price of no more than 20% higher than the average closing market prices on the 30 days preceding each transaction. The maximum amount of treasury shares is reasonable, but the maximum repurchase price exceeds the ECGS voting policy limit of 110% of the market price. Therefore, we recommend opposition.
In item 7, shareholders are called to a binding vote on the remuneration policy. Overall remuneration amounts are reasonable, but we strongly regret that the Company does not disclose the maximum amount and performance conditions used to calculate the CEO's annual bonus. We also regret that 50% of the 2016-2020 incentive depends on qualitative assessments and long-term incentive schemes were changed in 2019, by eliminating performance shares and relative performance conditions. Therefore, we recommend opposition.
Salvatore Ferragamo creates, produces and sales goods for men and women: footwear, leather goods, apparel, silk goods, jewels, other accessories and fragrances. as well as eyewear and watches manufactured under license by third parties. Co. sells its products through: a network of single Salvatore Ferragamo brand stores, managed both directly and by third parties; and presence in department stores and multibrand specialty stores. Co.'s fragrances product category involves the creation, development and production of fragrances and related products under the Salvatore Ferragamo brand. Co. is also active in the licensing of the Salvatore Ferragamo brand and in real estate management.
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