Swatch Group refutes the allegation of an improper election procedure
Swatch Group refutes the allegation of an improper election procedure
In a statement on its website, the Swiss company explains that, contrary to some media reports, no "opaque/confusing election process was carried out" with regard to the Board of Directors.
Background: At the Annual General Meeting of Swatch Group shareholders on 21 May, Steven Wood, who holds 0.5 percent of the listed Swatch Group with his investment company Greenwood Investors, stood for a seat on the Board of Directors as a representative of the bearer shareholders.
However, Wood sees things differently and considers the result to be legally untenable, as he said in an interview with the FAZ last Saturday.
How can that be?
At the aforementioned Annual General Meeting, Steven Wood received 61.9 per cent of the votes in favour from the bearer shareholders. By contrast, the Annual General Meeting - i.e. all shareholders - rejected his candidature with 79.2 per cent. The previous representative of the bearer shareholders on the Board of Directors, Jean-Pierre Roth, had also received more votes from the bearer shareholders. According to the Swatch Group, he is therefore entitled to the seat as the sole representative of the bearer shareholders on the Board of Directors.
Steven Wood is of the opinion that the election process was not conducted properly and argues that it was not clear from the programme for the Annual General Meeting that the election was about "Wood versus Roth".
Swatch Group contradicts Wood and media reports
The Swatch Group clearly contradicts this: "This is wrong," it says on the Group's website, and continues:
"Swatch Group clearly proposed the election of Mr Jean-Pierre Roth as a member of the Board of Directors in item 5.7 of the invitation and the Annual General Meeting elected him to the Board of Directors with 86.5% votes in favour. The Swatch Group also informed that of the total 86.5% votes in favour of Mr Jean-Pierre Roth at the Annual General Meeting, 68.6% votes were cast by holders of bearer shares. (...) While Mr Steven Wood was elected as representative of the bearer shareholders with 61.9%, the General Meeting rejected his election as representative of the bearer shareholders to the Board of Directors with 79.2% due to the aforementioned important reasons. This is fully in line with the widely cited decision of the Swiss Federal Supreme Court, which states that the General Meeting has the right to reject the election of a representative of a class of shares to the Board of Directors for good cause."
With this announcement, the Swatch Group is presumably reacting, among other things, to Wood's interview with the FAZ, in which he questioned the regularity of the election and announced possible reactions:
Swatch investor Wood wants to remain on the Board of Directors
"If Swatch continues to refuse to legitimately implement my election to the Board of Directors, we will probably convene an Extraordinary General Meeting. Then we could also put other measures on the agenda to improve corporate governance. After the scandalous course of the recent Annual General Meeting, many shareholders feel betrayed; they want to see changes. Dissatisfaction has reached a new, higher level. The holders of bearer shares approved the actions of the Executive Board and Board of Directors for the 2024 financial year with only 55.7 per cent of the votes. If this vote were to take place today, the result would probably be less than 50 per cent."
Despite these harsh words, Wood believes in a possible good working relationship with Swatch Group CEO Nick Hayek, who is "indispensable to the company". Moreover, he would not take the current events personally.
"That's why I still believe that I could work very constructively with the Hayek family. Their reaction is also somehow humanly normal. After the remarkable success story in the 1990s and 2000s, they are proud and think they don't need any help. They simply don't want change. But with the share price at a 15-year low, it's time to think about new ways forward."
