Valmet Corp – AGM 16 June 2020
In general, Valmet Corporation is in compliance with the Finnish regulations relating to the organization and procedures of the Annual General Meeting.
The AGM was initially called on March 19, and postponed to June 16. The Agenda remained the same, and the only change is represented by a lower number of shares to be repurchased under the authorization voted in ITEM 16 (from 6.7% to 3.3% of the share capital).
Under ITEM 8, the board of directors proposes to distribute a dividend of EUR 0.80 per shares on 2019 results. The proposed dividend distribution is equal to 59.6% of consolidated net income and it is fully covered by free cash flow. Although ECGS acknowledges that the Company is currently well capitalised, it considers that the potential impact of the Covid-19 induced crisis is not yet known, and it therefore recommend shareholders to OPPOSE the proposed dividend distribution.
Under ITEM 10, the board of directors seeks approval of the Company's executive remuneration policy. In general, ECGS deems the overall level of transparency of Valmet's executive remuneration policy in line with Finnish standards, and remuneration amounts are reasonable. However, concerns may arise over the possibility to pay extraordinary bonuses, and long-term incentives depend on performance periods of 1 year, which is not long enough to align the interests of executives with the creation of sustainable value in the long term. Therefore, ECGS recommends to vote OPPOSE.
Under ITEM 17, the board of directors seeks authorization to issue shares. In aggregate, the authority requested is limited to 13.3% of the Company's share capital. The authority also includes the possibility to issue shares to the Company itself without payment. The requested authorization exceeds our voting policy limit (10% of the share capital), and ECGS is not in favour of general authorizations to issue shares (to the Company) without payment. Hence, ECGS recommends to vote OPPOSE.
Co. is a holding company. Through its subsidiaries, Co. is a supplier of paper and board machines, and process automation systems. Co.'s operations are divided into five segments: paper and board machinery, which makes paper, board and finishing machines; converting equipment, which supplies machinery for the packaging and printing industries; automation, which makes applications and solutions used for the measurement, control and information management of industrial processes; power transmission, which makes industrial gears and hydraulic motors, and automotive, which specializes in the production of cars.
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