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Vereinigung Institutionelle Privatanleger e.V.

V I P Vereinigung Institutionelle Privatanleger e.V. · Kuthstrasse 37a · D-51107 Köln association of institutional shareholders association des actionnaires institutionnels

Per Telefax: + 49 621 421 463 Südzucker AG - Vorstand Investor Relations Maximilianstr 10 D 68165 Mannheim

Kuthstr. 37a D-51107 Köln www.vip-cg.com Hans-Martin Buhlmann Vorsitzender Tel: +49 (0)221 · 290270 0 Fax: +49 (0)221 · 290270 1 [email protected]

25.06.2006

Annual General Meeting of Südzucker AG on 27 July 2006

note/VIP-claus/VIP-CM_Suedzu 072006.DOC

Dear Dr. Spettmann, Dear Board Members, For the Annual General Meeting of Südzucker AG convoked in the Federal Gazette of 02. 6. 2006 for 27. 7. 2006 we ­ VIP Vereinigung Institutioneller Privatanleger e.V. (Köln, fax 069 791245165)(www.VIP-cg.com) ­ hereby announce, pursuant to § 126 AktG, as a shareholder in the company, the following (counter-)motion for the agenda, and call on all shareholders to vote with VIP or authorize VIP to cast their votes for it or in accordance with instructions: 1. Counter-motion on agenda item 6: The executive and supervisory boards propose to resolve that "until 2011 ... there shall be ... no disclosure of individual emoluments and other benefits received by each executive director, in either the annual or the group accounts." We call on all shareholders to reject this proposal, with the consequence that the statutory rules will apply, and put the farther-reaching motion with the proviso that it be voted on before the management motion. For in accordance with recognized democratic usages and traditional good custom, the "farther-reaching motion" ­ VIP's ­ should be voted on first.

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Motion: The general meeting resolves (changes from management proposal italicized) : Until 2011 ... there shall be ... no disclosure of individual emoluments and other benefits received by each executive director, in either the annual or the group accounts; this provision shall however apply only to accounts in which the result exceeds at least 2 of the following 3 indices (operating result up at least 7%; ROCE of at least 10% reached; share price up at least 5% on an annual comparison). Otherwise, the indications called for in the statutory principles on individualized emoluments shall be supplied.

2.

Alternative motion under agenda item 6: Alternatively, and for the case that the chair, contrary to custom, first holds the vote on the management motion, we further move that the part of our motion going beyond the management motion in content be additionally voted on as a "supplementary motion" within the meaning of and in accordance with the provisions of the Rules of Procedure of the German Bundestag, §88(1), adduced in substitution. We explicitly reject the automatic coupling of our original motion with a vote on the management motion.

As a "supplementary motion" within the meaning of §88(1) of the Rules of Procedure of the German Bundestag, we move that: The general meeting resolves that the following provision be attached to the resolution just adopted in the general meeting of 27 July 2006 on the management motion (of the executive and supervisory boards) on agenda item 6: The vote for the optional right not to indicate the individual emoluments of board members pursuant to §§ 285 and 314 HGB shall be reversed where in the immediately preceding accounts the result has not exceeded at least 2 of the following 3 indices (operating result up at least 7%; ROCE of at least 10% reached; share price up at least 5% on an annual comparison). Should 2 of these 3 indices fail to reach the minimum indicated, then the indications called for in the statutory principles on the individualized emoluments of both boards shall be supplied. 3. Summarized justification of the motions on agenda item 6: Justification:

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The justification can be summarized since motion and alternative motion coincide in content and are built upon the same idea. The German legislator has very sensitively taken up the ideas of global capital investors on avoiding through transparency provisions the excesses that have arisen in various places. VIP criticizes the disclosure rules since as adopted, rather than an accepted consensus arrangement with control by the owners, they are much easier to circumvent ­ and this year's negative experience from Switzerland (Novartis and UBS) is only one object lesson. Also criticizable in the procedure was that instead of a cultural and ethical debate there was only an "imported," ex cathedra imposition, meeting with much resistance and provoking unproductive discussions. Where management's operational achievements are "adequately" (here individually measured by 2 out of 3 indices) successful, the shareholders may by qualified majority of 75% of votes present ­ which on last year's figures would mean 59% of share capital ­ allow the executive and supervisory boards to give a summary indication of emoluments. In other cases the capital market has practically waived obligations for publication of quarterly accounts ­ as long as the results are "adequately" quick and lively (see the Porsche chart). Very specially where, as with the present Südzucker supervisory board, all the so-called capital representatives are with one exception (a banker) in fact farmers, and as suppliers to the company naturally involved in a conflict of interest, such a board, of a company that has become more global, ought to show greater sensitivity to an internationally debated issue than comes out in its motion! The board, operationally successful in Europe, is already in practice partly transparent because of German and non-German summary indications of emoluments in group and individual accounts ­ a contradictory discrimination, as with codetermination at work. The occasion for VIP's motion is that the international capital market favours individualized indication. The principle also applies to a successful company ­ Südzucker shares have shown (volatile) development from 11 in 2001 to 22 in 2006. It is striking that the electronic Federal Gazette for 2.6.2006 published the TOP 6 ­ which we wish to amend ­ after the farmers' supervisory board had just met on 24.5.2006 to discuss precisely that. 14 days before ­ just when the documents for the supervisory board meeting on establishment of the balance-sheet and voting out the law were sent out ­ a dramatic fall in the quotation came ­ from 22 to 17 inside 4 weeks. Quite clearly, shareholders have already voted with their feet against TOP 6 ­ and there is no other critical item on the agenda. One is unpleasantly struck by the fact that the Supervisory Board report reflects no debate on emoluments ­ even concerning themselves! Instead of confronting conflicts of interest and insider questions, the sole "justification" for the resolution on the agenda says only that "options and the like do not exist" ­ if at least there had been exclusion here of anything similar for the duration of the resolution, one could at any rate assume some objective consideration.

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The farmer supervisory board's lack of justification, the manifest position taken by the market against the management motion, the current discrimination of individual executives and the absence of evident necessity for the management resolution make it clear that here an antisystem, coordinated, conflict-enhancing conduct of members of the bodies among themselves is spreading, on the motto "do ut des" ­ after all that, the VIP motion was required, and we ask all shareholders for their assent, in one of the forms VIP proposes. Moreover, it serves the interest of the company and shareholders better with its provision of a performance-oriented incentive than an uncritical discarding of culturally rejected statutory guidelines does. Not curiosity and envy but responsible handling in "transparent" fashion of such "intimate" circumstances of the transfer of assets between the company and its agents should be and remain the maxim ­ and experience shows that the right time is while profits are still rising.

We ­ VIP (www.VIP-cg.com) ­ would point out that Südzucker AG is obliged under § 126 AktG to make the above (counter-)motions accessible to all shareholders. We are ready and willing to represent voting rights of third parties or carry out instructions on the casting of votes. Yours sincerely, V I P Vereinigung Institutionelle Privatanleger e.V. Hans-Martin Buhlmann Chairman

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