“While German blue chip firms are prime targets for shareholder activism for some time, the picture changed with small and mid-sized companies increasingly emerging on the radar of activists. Recent successful campaigns reflect that even the two-tier board structure does no longer protect companies and their boards from stockholder agitation pushing for corporate change.”
Michael Reinert, Senior Managing Director
Country:
Germany
Average % of insider ownership:
To learn more about this country, please click on the tabs below
Shareholder activism in Germany has picked up significantly with 16 activist approaches recorded in the first half of 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 constitution of the Supervisory Board and governance issues such as executive remuneration, was facilitated by the rising support of institutional investors and proxy advisors. This has provided a new level of confidence for activists in Germany, who are now looking to make their next move.
Shareholders reaching, exceeding, or dropping below a 3 percent 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 percent.
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. Gain Board Representation
2. Removal of CEO or other Board member
3. Business Restructuring
Campaigns By Year
Total
Campaigns
Notable Invested Activists
• Cevian Capital
• Elliott Management
• Wyser-Pratte Management Co
Recent activism campaigns
| Volkswagen | VS. |
The Children's Investment Fund Management |
| STADA AG | VS. |
Wyser-Pratte Management Co |
| Bayer AG | VS. |
Henderson Group Plc |
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