Volkswagen investors renew gripes over CEO’s dual role, despite special dividend

VOLKSWAGEN shareholders on Friday (Dec 16) renewed their criticism of chief executive officer (CEO) Oliver Blume for his dual role, even as they prepared to approve a special dividend of 9.6 billion euros (S$13.9 billion) following the listing of Porsche.

Blume, who became group CEO in September, remained as Porsche’s CEO even after the luxury car manufacturer’s listing. This prompted concerns among some investors about the pressures on his time and potential conflicts of interest. Porsche is owned by Volkswagen.

At a shareholder meeting to approve the special dividend, Blume said Volkswagen was “on solid footing in a challenging environment”, with his first hundred days spent on tasks such as reshuffling senior roles, defining the group’s strategies for China and North America, and revising its software and platform plans.

Yet shareholders, including DWS and investor association SdK, criticised his dual role. DWS said that governance issues were dragging down the group’s valuation. The asset manager holds 2 per cent of Volkswagen stock, based on Eikon data.

Hendrik Schmidt of DWS said: “We don’t want a part-time CEO – neither at the mother nor at the daughter company.”

SdK representative Mark Liebscher told Blume: “You are constantly putting on different hats. It is hard for us to believe that this works at board meetings.” 

Since opening at 82.50 euros on Sep 29, Porsche shares have risen 18.5 per cent to 97.74 euros. Meanwhile, shares of Volkswagen rose just 3.9 per cent to 133.56 euros in the same period.

Group chief financial officer Arno Antlitz conceded that Volkswagen’s potential must also now be proven to markets.

“Making the real value of Porsche visible was important. But through this, it has also become clear that the current valuation of Volkswagen is imbalanced. We want to change that.”

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Shareholders are widely expected to vote in favour of a payout in January of a special dividend of 19.06 euros per share from the proceeds of the Porsche listing.

In his opening speech, Blume said that Volkswagen was working to diversify its global presence in light of geopolitical tensions. He added that a decision on a planned battery plant in eastern Europe, which was postponed last week, would come soon.

“We are working on a globally balanced presence – in Europe, China and a strong third leg of North America,” he said. REUTERS