United Internet – AGM 20 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.
Item 5: Ernst & Young, Stuttgart, is proposed as auditor for the current financial year. Ratio of non-audit/audit fees was 36.88% during the year under review and 58.87% over a three-year aggregate period which exceeds our guidelines. Furthermore, we note that Ernst & Young has audited the Company since the financial year 2002 which exceeds our maximum acceptable term of office. We therefore recommend opposing the re-election of Ernst & Young as auditor.
Items 6a and 6c: We recommend to oppose the (re-)election of Dr. Claudia Borgas-Herold and Kurt Dobitsch due to concerns over aggregate time commitments. In the case of Mr. Dobitsch we recommend opposition also due to the fact that the remuneration system for the Management Board has not yet been put to shareholder approval and Mr. Dobitsch is the Chairman of the Supervisory Board.
Item 7b: In connection with the proposed extension of the Supervisory Board from three to six members (item 7a of the agenda), the Company's CEO and major shareholder Ralph Dommermuth shall be granted the right to nominate an additional (second) member of the Supervisory Board without seeking shareholders' approval. ECGS is opposed to such special designation rights for shareholders. We recommend opposition.
Items 11c and 11d: The Company's Articles of Association shall be amended in order to allow for the 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.
Item 13: The Company shall be authorised until 31 August 2023 to increase the share capital by up to EUR 77.5m (~39.95% of the share capital) by issuing shares against contributions in cash and/or in kind. We recommend opposition as the total shares issued while disapplying preemptive rights under the proposed and all existing authorisations may reach up to 20% of the share capital which exceeds our guidelines.
Item 14: The Company shall be authorised until 31 August 2023 to issue convertible bonds and/or bonds with warrants (bonds) up to a face value of EUR 900m with conversion/option rights for shares in the Company with a proportionate share in the capital stock of up to EUR 25m (~12.89% of the share capital). The capital stock shall be conditionally increased accordingly. We recommend opposition as the total shares issued while disapplying preemptive rights under the proposed and all existing authorisations may reach up to 20% of the share capital which exceeds our guidelines.
United Internet AG is a Germany-based Internet service provider (ISP) and holding company of the United Internet Group. The Company's products and technical services are divided into two key segments. The Access segment comprises narrowband, broadband and mobile access subscriptions, including the corresponding applications. The Applications segment includes such applications as home pages, e-shops, Personal Information Management applications, group work, online storage and office software. The Application segment also includes the operations of the Company's brands Sedo and affilinet, which serve customers performance-based advertising and sales possibilities. The Company's brand portfolio also includes GMX, WEB.DE, 1&1, united-domains, Fasthosts and InterNetX. In addition, the Company develops Internet based applications, such as cloud applications. The Company acts primarily via its wholly owned subsidiary 1&1 Internet AG, and Sedo Holding AG, in which it holds a majority stake.
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