Activist hedge fund CIAM says SCOR cannot ignore shareholder discontent after AGM vote

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Activist hedge fund CIAM says SCOR SE’s board of directors can “no longer ignore” shareholder discontent over governance practices, after the French reinsurance firm’s annual general meeting registered sizeable opposition to the board’s proposed remuneration policies.

London- and Paris-based manager CIAM has been campaigning against what it sees as “significant corporate governance deficiencies” at SCOR, and had earlier called on shareholders to vote against the re-election of Kessler and board directors, and to oppose planned remuneration policies at Wednesday’s AGM.

The ballot saw 44.4 per cent of shareholders vote against chairman Denis Kessler’s remuneration for 2020, with 36.8 per cent opposing his remuneration policy for 2021.  At the same time, some 23 per cent and 19 per cent were against the renewals of Claude Tendil and Bruno Pfister as members of SCOR’s Remuneration and Appointments Committee, respectively.

In a statement, the activist hedge fund said minority shareholders had sent “a strong message” to the board, adding that a “change in SCOR's governance is essential, and this will require an independent Chairman by the 2022 AGM.”

“This high level of shareholder opposition, as well as the significant abstaining votes, proves that SCOR’s shareholders have rejected the company’s problematic governance practices, resulting from the Board of Directors’ inaction and the excessive control exercised by Denis Kessler, which is damaging the company’s performance.”

It added: “Such opposition is significant since SCOR neutralised, a few days before the AGM, its main shareholder Covéa, which owns 15,767,803 shares, representing over 12 per cent of voting rights, excluding abstentions.

“CIAM would have defeated the resolution on Denis Kessler’s remuneration if Covéa had voted against it, or even abstained.”

The activist manager said it will now “carefully scrutinise” the board’s upcoming decisions, and its reaction when faced with such a “high level of mistrust”.

CIAM – whose investment strategy involves taking global equity positions in companies based on a range of corporate events, focusing on special situations and merger arbitrage – has been agitating against the French reinsurer’s corporate governance and stock market performance, which has lagged industry peers.

Earlier this month, the manager – which was established in 2010 by Catherine Berjal and Anne-Sophie d’Andlau - launched a fierce attack on SCOR’s management succession plans, with CIAM CEO Berjal called for a “rapid separation of powers” at the top of the company.

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Hugh Leask
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