Dear, in these last days, Repsol, has revealed a very interesting conflict of interests between the CEO and largest shareholder of the company, the builder Sacyr, which holds 20.01% of their capital. The issue of conflict is the dividend paid to shareholders by the year 2009 as the Chief Executive has proposed it to the front 0.425 0.525 euros per share for the same sum in 2008. The CEO does decrease based on the result, because of the economic situation and the need to continue implementing the strategic plan of the company that asks a series of planned investments in it. Meanwhile, the main shareholder, need fluid and wanting a return on your investment - 6525.5 million since 2006 - not to lower the dividend.
The conflict of course, interests are conflicting, but what is a dividend of the results of 2009, common sense would point to caution, so that the general meeting of shareholders next spring, with accounts already closed, it was decided that the final dividend. Then he could maintain the same level as the year 2008 - 1,05 euros per share - could be increased - as has been in recent years - or you can download.
It is true that Sacyr shareholder with a 20% stake and which is represented on the board, but so is the free float, capital in the hands of retailers, is almost 61% - 19% hold the remaining Criteria (9.28%), Pemex (4.81%) and Repinves (5.02%) - and there is a fact that should never be forgotten: the shareholders are sovereign and exercise sovereignty in the general meeting of shareholders. That is why in the previous paragraph said that the conflict might best resolve it in the general meeting of shareholders will see the end of 2009.
Corporate Conflicts of this type need not be seen in negative, after all the interests are legitimate and the only safeguard is to be good communication and fair play. These situations, a second generation family businesses and following n'apareixen often. There are rare cases of a brother, chairman of the board and CEO (20% of the capital, for example) and two, three or more siblings not involved in management but are also part of the capital. The first is the one who has income of the company through guaranteed salary, the other brothers can not receive any income not to pay dividends. At some point, one or more shareholders of these families can claim it, but the President replied that brother does not touch because they are now in motion a series of projects that require liquidity. The conflict, not corporate, but family is served. In these cases, the institutions that would be good business - general meeting of shareholders, board of directors - are functioning properly and allow the conflict became the family to be a conflict in which majorities decide what corporate take agreement, that agreement may not be best for the company, but that is legitimate. However, depending on the degree of responsibility and knowledge of corporate shareholders, but that's another topic.
Conflicts such as Repsol are positive for the corporate life, forcing the operation of government institutions and, moreover, happens to the best families.
Joseph Albet
23-11-2009
29/11/2009 at 23:11
It really is very interesting to read your thoughts. We can only work well with companies' well-governed "and" well-governed entities. " From my point of view, to achieve two separate requirements: 1. Having technical knowledge to govern them. If you do not have them because there are excellent experts who can advise us (as in your case) and teach us to do so. and 2. People must be willing to learn enough to be "complete" to have to do it.
On why I speak of knowledge in capital letters: Knowledge Knowledge and technical staff (people complete, safe and without fear.) With the two premises can be met safely differences of opinion of the president and shareholder of companies such as avoided cases of Palau.