“Large activist funds have stepped up the pressure on German companies, threatening the insulation that the two-tier board structure would normally provide.”
Michael Reinert, Senior Managing Director
Country:
Germany
Average % of insider ownership:
Activism
Threat Level
To learn more about this country, please click on the tabs below
Shareholder activism in Germany has picked up significantly with 17 activist approaches ongoing through 2016. While this trend is likely to continue, German corporate boards are structured under the two-tier system which often insulates executives from activism. The recent success of several large campaigns, targeting the board structure and executive remuneration as well as opposing takeover terms, has provided a new level of confidence for European institutional investors and activists looking to make their next move.
Shareholders reaching, exceeding, or dropping below a 3% threshold must disclose their voting interests within four business days.
Disclosure of information on aims, origin of funds, and planned influence on the management of the company is required if the voting interests reach or exceed 10%.
Management is generally ring-fenced by the two-tier management board/supervisory board structure, hence members of the management board cannot be proposed by shareholders (they are appointed by the supervisory board).
Companies are not required to hold an annual vote on remuneration of the management board. Although the general meeting may resolve on the approval of the compensation scheme, this resolution does not give rise to any rights or obligations.
Further structural defenses include preference shares (non-voting shares), restricted transferability of registered shares, and staggered terms of members of the supervisory board.
Top Campaigns by Type
1. Lack of/Inaccurate information from Company
2. Remuneration
3. Board Independence
Campaigns By Year
Total
Campaigns
Notable Invested Activists
• Elliott Management
• The Children's Investment Fund Management
• Active Ownership Capital
Recent activism campaigns
| SLM Solutions Group | VS. |
Elliott Management |
| Volkswagen | VS. |
The Children's Investment Fund Management |
| E.ON | VS. |
Knight Vinke Asset Management |
Total Active
Campaigns
Contact FTI Consulting
Capital Markets Research and Activist Engagement
Managing Director
+1 312 861 4721
Geoff.Serednesky@FTIConsulting.com
Chairman
+49 69 920 37 100
Michael.Reinert@fticonsulting.com
Senior Managing Director
+49 69 920 37 110
Lutz.Golsch@fticonsulting.com