The battle between German electronics company Infineon and rebel shareholders is rapidly turning into a test case of the country’s corporate governance practices, with more shareholders now opposing the company’s choice of supervisory board chairman.
Infineon has run into trouble over its desire to appoint Klaus Wucherer to chair its supervisory board. Wucherer has been a director of the company since 1999; Hermes, a U.K. activist investor, has started a campaign against his chairmanship, arguing a more independent candidate was needed.
The Hermes campaign is the first time that an institutional investor has tried to force out a senior director of a big German company. Two other large institutions, Legal & General and Bank of New York Mellon, have now joined the attack, backing proposals to appoint an alternative candidate, Willi Berchtold, director of auto components company ZF Friedrichshafen.
The rebels claim that shareholders made clear their lack of support for the supervisory board at last year’s annual general meeting, when only just over 50 percent voted to approve its work. “The vote indicated a clear demand for extensive renewal of the supervisory board,” the rebels argue.
But on top of promoting Wucherer to chairman, Infineon is also seeking to reappoint four members of the supervisory board, which is at the same time being slimmed down from 16 to 12 people. “This implies merely a partial renewal,” the rebels said.
In response, the company defended Wucherer’s track record and said his appointment complied with German company law and the German Corporate Governance Code.
Supervisory board members will be elected at a shareholder meeting in February.
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