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January 18, 2010 6:42 pm
Germany is braced for its first proxy fight at a blue-chip company after an influential UK investor launched an attempt to oust the chairman-designate of Infineon, the chipmaker.
Hermes, the fund manager owned by the British Telecom Pension Scheme, has submitted a proposal to replace Klaus Wucherer, due to become Infineon’s chairman at its annual meeting next month, with Willi Berchtold, the finance director of ZF Friedrichshafen, a privately held car parts supplier.
The proposal is likely to cause a storm in Germany where no company from the Dax 30 of leading businesses has faced a proxy fight, a battle in which shareholders disagree with a company’s proposal for a non-executive director and put forward their own candidate instead.
It will bring back memories of similar attempts several years ago at Deutsche Börse, which resulted in the chief executive and chairman leaving, as well as at Volkswagen, where investors shied away from a fight.
“It is new territory,” said Hans Hirt, head of European corporate governance at Hermes.
“It is important not just for Infineon but for the whole German corporate governance culture.”
Hermes’ battle with Infineon follows a disastrous time at the Munich-based computer chipmaker, which came close to bankruptcy during the credit crunch after a series of losses.
Its share price collapsed from €35 at its flotation a decade ago to €0.35 a year ago before recovering to about €4 on Monday.
Shareholder anger bubbled over at the annual meeting last year when Max Dietrich Kley, the supervisory board chairman, was re-elected by 50.03 per cent.
Hermes believes that vote suggested shareholders wanted a new start on Infineon’s supervisory board. Mr Kley will step down this year but is set to be replaced by Mr Wucherer, a former Siemens executive who has been on the board since 1999.
“For a new start at Infineon, a renewal at the top of the supervisory board is particularly important,” wrote Nigel Labram, chief executive of the BT Pension Scheme in the proposal for next month’s meeting.
Mr Wucherer recently agreed to pay €500,000 ($720,000) to his former employer Siemens in out-of-court damages over an alleged breach of supervisory duty relating to a multibillion-euro bribery scandal at the engineering group.
Infineon could not be reached for comment.
Mr Berchtold is finance director at ZF, one of Germany’s biggest private companies with revenues of €12.5bn.
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