NH’s Minority Shareholders May Ask To Join The Board
29 May 2015 – Expansión
29 June / The agenda for NH’s shareholders’ meeting does not currently include the appointment of any new directors. UBS now holds a 4.36% stake.
In the interests of progress in terms of corporate governance and to increase transparency, many listed companies, including the NH Hotel Group, are adapting their corporate bylaws to the new Capital Company Act. Thus, NH will include a item on the agenda of its shareholders’ meeting, which will be held on 29 June, about the reasonable balance of its board of directors, whose composition should reflect the relationship between the stable and free-floating capital.
In fact, the composition of NH’s board of directors has sparked unrest amongst the fund managers and minority shareholders due to the hotel group’s decision to not cover the two vacant positions left by Intesa Sanpaolo, when it sold its shares, by independent directors. Yesterday, their fears were confirmed. The agenda for the shareholders’ meeting includes the ratification of two directors – Francisco Román as an independent director and Ling Zhang as a representative of HNA, the majority shareholder of NH – and the renewal of two other directors – José María López-Elola, as an independent director and José Antonio Castro, as a representative of the Hesperia Group. There was no mention of any new appointments.
NH’s board comprises 11 people in total: four representatives of HNA – which holds a 29.5% stake -, two from Hesperia – with a 9.09% stake -, three independent directors, the CEO – Federico González Tejera – and the Chairman – Rodrigo Echenique-, who continues in the role despite the exit of Banco Santander, the shareholder that he previously represented.
Nevertheless, the composition of the board may change in the short term. The 8.56% stake held by Santander was distributed amongst three (fund) managers, which already held stakes in NH: BlackRock, Oceanwood and Henderson. The first two now hold more than 7.5%. The funds, which have shared their concerns about the reduction in (the size of) the board with NH, will request their own inclusion on the board of directors and their request may be discussed at the shareholders’ meeting. According to the bylaws, shareholders that represent at least 3% of the share capital have five days following the announcement of the shareholders’ meeting to request the inclusion of one or more items on the agenda.
Meanwhile, UBS now owns a 4.36% stake. On 21 May, the Swiss bank purchased 9.13 million shares from Santander for €46.57 million.
Rodrigo Echenique received €300,000 in 2014. This year, he will receive €200,000, i.e. 33% less.
Federico González Tejera, the CEO, earned €1.62 million (in 2014), up 34%. His variable salary amounted to €788,000.
The other board members
In addition to Echenique and Tejera, the 16 people that held positions on the board in 2014 received €692,000 in total.
Original story: Expansión (by Yovanna Blanco)
Translation: Carmel Drake