EADS' shareholders express anger over corporate governance, severance pay

EADS' shareholders express anger over corporate governance, severance pay

	Published : Fri, 04 May 2007 15:48 By : Agencies Print this Story

AMSTERDAM (Thomson Financial) - Tempers ran high during the EADS NV general meeting of shareholders, as several individual and institutional shareholders voiced their discontent with the group's corporate governance structure in no uncertain terms.

A representative of UK investment fund Hermes accused the EADS board of being responsible for 'an enormous destruction of (shareholder) value', noting that EADS has recently been 'the worst performer on the CAC40 and DAX bourses'.

The Hermes representative also said that the management board did 'not react decisively enough in the A380 crisis', referring to recent production and delivery delays for the Airbus passenger aircraft flagship.

Because of all this, and amid 'pending criminal and civil proceedings into alleged insider trading', Hermes stated that it would vote against discharging the management board of liability at the end of the AGM.

Another institutional shareholder called for a 'unified management to face world threats (to the company)', instead of focusing on 'internal political matters'.

A representative of the Dutch shareholders association, the VEB, voiced harsh criticism over former EADS staff, who he said are suspected of insider trading but who are still getting 'big severance packages' after leaving the company.

'Someone who is accused of insider trading should not be rewarded; he should be sent to prison,' the VEB said.

EADS co-chairman Arnaud Lagardere noted that 'nobody has been convicted of insider trading' and that therefore there is no reason to withold severance pay packages.

Lagardere also defended the board in more general terms by stating that most EADS' divisions have been performing well.

'The corporate governance structure has worked well for 5 years,' Lagardere said, although he acknowledged problems at Airbus. 'There have been problems and accidents but I think it is too quick and too easy to say that it all has to do with the corporate governance structure'.

Many French shareholders criticised EADS' payment of a severance package to former management executive Noel Forgeard, whose sacking and subsequent severance pay has become a topic of hot debate in the French presidential elections.

The management board refused to make public the minutes of a board meeting, during which it was decided to give Forgeard his severance pay.

'Those board minutes will never be made public,' Arnaud Lagardere said.

Earlier, co-chairman Ruediger Grube had said that Forgeard's severance package was part of his employment contract.

By Kaj Leers, kaj.leers@thomson.com

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