Presentation of the 3 rd Report on Ibex-35 Annual General Meetings


Attendance grows in 69% of Ibex-35 AGMs  

•  The average rise was 9% compared with the previous year
•  Only one in three minority shareholders attend AGMs in Ibex-35 companies

The Minority Shareholders' Forum, promoted by the IESE business school through its IRCO research centre, and the Inforpress PR consultancy, has presented the 3rd Report on Ibex-company AGMs in 2007. The study centres on analysis of participation by minority investors at meetings, and on monitoring good practice in relation to transparency and corporate governance.

The report shows an increase in meeting attendance over the previous year in twenty-four businesses, which represent 69% of Ibex-35 companies . Attendance was up by more than 10% in eleven companies, while participation was only down in nine companies, i.e. 26% of the total number. Repsol YPF, Endesa and Iberdrola were the companies that increased attendance most as compared with the previous year, with rises of 64%, 56% and 40% respectively.

The issues that have most affected participation in AGMs are attendance bonuses and whether companies are involved in corporate operations (acquisitions/mergers). The three companies offering a bonus - Repsol YPF, Iberdrola and Metrovacesa - held first, third and eighth positions on the list of highest rises in attendance, with 64%, 40% and 18% respectively. Endesa had an increase of 56% and was at the time involved in a possible merger, while Iberia , with an increase of 30%, was surrounded by rumours of a hostile takeover.

According to a hypothesis developed by the Minority Shareholders' Forum, 35% of floating capital is represented at the meetings, i.e. one in three shareholders . According to this supposition, which assumes that company owners who are not considered free float (permanent in nature) always go to the meetings, in seven Ibex-35 companies meeting attendance would be more than 50% free float. These companies are: Metrovacesa, Iberdrola, Sacyr Vallehermoso, Banco Sabadell, Repsol YPF, BBVA, Banco Santander. Nevertheless, it must be taken into account that two of them, Metrovacesa and Sacyr Vallehermoso, have a very low level of floating capital.

Eight Ibex-35 companies required only one share to qualify for meeting attendance in 2007. Acciona, FCC and Iberdrola adopted this measure for the first time at their 2007 AGMs; it will be applied for the first time by Banesto at their 2008 AGM. Special mention should be made of modifications to the statutes of Banco Popular, which will go from requiring 1,250,000 shares this year, to just 1,000 shares in 2008. In 2006, only six companies required just one share to qualify for attendance.

According to Nuria Vilanova, president of Inforpress, identification of shareholders is something that improves participation, given that it allows companies to communicate directly with shareholders through campaigns informing them of the AGMs and how to participate.

Regarding the importance of minority shareholders to companies, Javier Rodríguez Vega, director the Spanish Association of Investor Relations, maintained that during unstable periods in the markets, minority shareholders provide stability, while institutional shareholders are more likely to be swayed by short-term prices, "getting out" when the share price falls.

Xavier Gil Pecharromán is secretary of the Economic Journalists' Association. He claimed that minority shareholders' associations are not well represented in Spain , and given the experience in other countries, it seems unlikely that companies will support their creation and promote their expansion.

The report also shows improved facilities for voting on-line during AGMs. This service was offered by five companies this year (Banesto, Banco Santander, Cintra, Ferrovial and Gamesa), as opposed to two last year. Electronic voting was allowed by twenty-six of the Ibex-35 companies, against twenty-four the previous year, while only two (Bankinter and Banco Popular) allow voting by SMS.

The content of meetings and their proposed dates are other aspects that have been analysed. The Forum recommends giving greater weight to questions at AGMs, along with improving the quality of information and service provided by shareholder information offices.  

About the Minority Shareholders' Forum

The Minority Shareholders' Forum is a joint initiative by IRCO, the research centre at the IESE business school, and the Inforpress PR consultancy. Created as a new stage for debate, to generate and promote knowledge in the financial area, its main objective is to analyse specific communication problems between minority shareholders and listed companies. The Forum has an Advisory Committee, made up of recognised professionals from the business world, such as Enrique de Aldama, Claudio Boada, Jesús María Caínzos, Blas Calzada, Juan Iranzo and Aldo Olcese, with the collaboration of the Economic Journalists' Association (APIE) and the Spanish Association of Investor Relations (AERI).


For more information:
Mónica González - monicagonzalez@inforpress.es
María Luisa Ocaña - mlocana@inforpress.es
Inforpress - 91 564 07 25 - 608 21 39 30