Bayer Executives Secure Investor AGM Support

20.04.2022 - Bayer CEO Werner Baumann will receive some needed support from two major shareholder groups at the upcoming annual general meeting (AGM) but he is not out of the woods yet.

Institutional Shareholder Services (ISS) and Glass Lewis have said they will approve of the company chief’s actions last year. Nevertheless, the two often- dreaded AGM vote “influencers” have indicated they are not convinced that management has earned the proposed salary increases.

Supported by Alatus Capital, Singapore-based major shareholder Temasek Holdings earlier called for another no-confidence vote against the managing board’s 2021 performance, accusing in particular Baumann of causing “significant shareholder value destruction.”

In a note to clients, however, Glass Lewis said it does not believe it would be in shareholders’ interests to broadly recommend withholding support, though some shareholders might be “reasonably concerned” about the company’s performance and its substantial environmental, social and governance and product risk exposure.

ISS has indicated it will support Baumann and his team, too, provided Bayer makes more progress toward resolving its Roundup litigation. Both shareholder advocates have criticized Bayer’s executive compensation framework, arguing that it fails to accurately reflect performance and potential fines from Roundup settlements.

Short-term incentive bonus adjustments prompted payouts that do not accurately reflect company performance, while some executives’ pension contributions can be considered excessive and are not aligned with the wider workforce or market practice,” the Bloomberg news agency quotes ISS as saying.

Glass Lewis noted that it was “troubled by two decisions taken by the board in the past year, namely the exclusion of litigation effects from the free cash flow metric under the annual bonus scheme, and the full awards to a departing management board member.” Liam Condon, who had management board responsibility for Bayer CropScience, recently moved from Bayer to Johnson Matthey.

Author: Dede Williams, Freelance Journalist