UPM Kymmene - AGM 31 March 2020
In general, UPM Kymmene ("UPM") is in compliance with the Finnish regulations relating to the organisation and procedures of the Annual General Meeting.
Under ITEM 10 the board of directors seeks approval of the Company's executive remuneration policy. ECGS notes that, following the entry into force of the EU Shareholders’Rights Directive (SRD II), this is the first time that UPM puts its executive remuneration policy to a vote. In general, ECGS deems the overall level of transparency of the policy in line with Finnish standards. On the other hand, ECGS notes that the total variable salary in the year under review, corresponding to 406% of annual base salary, exceeds the threshold of 300% under its guidelines. Accordingly, ECGS recommends to vote OPPOSE.
Under ITEM 15 the board of directors proposes to re-appoint PricewaterhouseCoopers as the Company's external auditor for the FY 2020. ECGS notes that the current auditor has been in office for 24 years. Therefore, even though the level of non-audit fees is conform to its guidelines, this proposal is NOT considered to be in accordance with ECGS’guidelines. ECGS therefore recommends to vote OPPOSE.
Finally, under ITEM 16 authorisation is sought to issue shares. In aggregate, the authority requested (with deviation of shareholders' pre-emptive rights) is limited to 9.37% of the Company’s share capital and as such would meet ECGS’guidelines.
However, ECGS notes that the authorisation includes the possibility to issue shares to the Company itself without consideration. ECGS is not in favour of general authorisations to issue shares (to the Company) without payment and only approves such a proposal when there is a weighty specific reason to do so and it is in the best interest of all shareholders. As it is currently unclear what these future conditions will be, ECGS does not consider this proposal in the best interests of all shareholders and therefore recommends to vote OPPOSE.
UPM-Kymmene is a global paper and forest products group, mainly engaged in the production of paper, with an emphasis on the manufacture and sale of printing and writing papers. Co.'s operations comprise of these segments: UPM Biorefining, UPM Energy, UPM Raflatac, UPM Paper Asia, UPM Paper ENA, UPM Plywood and Other. UPM Biocomposites, UPM Biochemicals business units and Group services are reported in Other operations. Co.'s activities are centred in European Union countries, North and South America and Asia with production plants in 13 countries.
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