Business

Volkswagen investors renew governance gripes, despite special dividend

VW logo at 2022 New York International Auto Show12

  • Shareholders to vote on dividend payout from Porsche listing
  • Carmaker on 'solid footing' – CEO
  • Decision on battery plant site in Eastern Europe 'soon' – CEO
  • Some shareholders still sceptical of Blume's dual role

BERLIN, Dec 16 (Reuters) – Volkswagen (VOWG_p.DE) shareholders renewed their criticism of CEO Oliver Blume's dual roles on Friday, even as they prepared to rubber stamp a roughly 9.6 billion euro ($10.2 billion) special dividend following the listing of Porsche AG.

Blume, who became group chief executive in September, has continued as CEO of luxury brand Porsche (P911_p.DE) even after its listing, prompting concerns among some investors about the pressures on his time and potential conflicts of interest.

At a shareholder meeting to approve the special dividend, Blume said Volkswagen was performing well in hard times, with his first hundred days spent on tasks such as reshuffling senior roles, defining its strategy for China and North America, and revising its software and platform strategy.

Yet shareholders including DWS and investor association SdK criticised his dual role, with DWS saying governance issues were dragging down Volkswagen's valuation.

"We don't want a part-time CEO – neither at the mother, nor the daughter company," Hendrik Schmidt of DWS, which holds 2% of Volkswagen stock according to Eikon data, said.

"You are constantly putting on different hats. It is hard for us to believe that this works at board meetings," said SdK representative Mark Liebscher.

Porsche shares have risen 18.5% to 97.74 euros per share since opening at 82.50 on Sept. 29, while Volkswagen shares have risen just 3.9% to 133.56 euros in the same period.

Responding to the shareholders on Friday, Blume defended his position. "I will keep both roles long-term," he said.

Shareholders are widely expected to vote in favour of a payout in January of a special dividend of 19.06 euros ($20.28) per share from the proceeds of the Porsche listing.

BALANCED PRESENCE

Blume said Volkswagen was diversifying its global presence in light of geopolitical tensions and that a decision on a planned battery plant in Eastern Europe, which was postponed last week, would come soon.

Record energy prices in Europe and high subsidies on offer in the United States have stirred unease among European policymakers that investments planned in Europe will instead be made abroad.

Volkswagen was weighing up locations based not only on the promised number of plants per region – totalling six gigafactories for Europe, according to the most recent plans – but on demand from the electric vehicle ramp-up in each region, a source close to the company said.

Still, Blume said the location in eastern Europe would soon be announced, while the carmaker was also looking for a battery plant in Canada.

"We are working on a globally balanced presence – in Europe, China and a strong third leg of North America," Blume said.

($1 = 0.9398 euros)

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Source reuters.com

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