VW investors renew governance criticism despite special dividend

BERLIN — Volkswagen Group shareholders renewed their criticism of CEO Oliver Blume’s dual roles, even as they approved a roughly 9.6 billion euro ($10.2 billion) special dividend following the listing of Porsche.

Blume, who became VW Group CEO in September, has continued as CEO of luxury brand Porsche even after its listing.

At a shareholder meeting on Friday to approve the special dividend, Blume said VW was performing well in hard times, with his first 100 days spent on tasks such as reshuffling senior roles, defining its strategy for China and North America, and revising its software and platform strategy.

Shareholders voted in favor of the special dividend, with 99.9 percent of votes.

Yet some investors including DWS and investor association SdK used the opportunity of the speeches ahead of the vote to criticize Blume’s dual role as chief of both companies, with DWS saying governance issues were dragging down VW’s valuation.

“We don’t want a part-time CEO – neither at the mother, nor the daughter company,” said Hendrik Schmidt of DWS, which holds 2 percent of Volkswagen stock according to Eikon data.

“You are constantly putting on different hats. It is hard for us to believe that this works at board meetings,” said SdK representative Mark Liebscher.Porsche shares have risen 18.5 percent to 97.74 euros per share since opening at 82.50 on Sept. 29, while Volkswagen shares have risen just 3.9 percent to 133.56 euros in the same period.

Responding to the shareholders on Friday,  Blume defended his position. “I will keep both roles long-term,” he said.

EV, digital progress

VW finance chief Arno Antlitz said the carmaker was confident it had “significant potential” for a higher valuation and that the market would soon recognize it was making strides in its electrification and digitalization plans.

Blume said VW was diversifying its global presence in light of geopolitical tensions and that a decision on a planned battery plant in eastern Europe, which was postponed last week, would come soon.

Record energy prices in Europe and high subsidies on offer in the U.S. have stirred unease among European policymakers that investments planned in Europe will instead be made abroad.

VW was weighing up locations based not only on the promised number of plants per region – totalling six gigafactories for Europe, according to the most recent plans – but on demand from the electric vehicle ramp-up in each region, a source close to the company said.

Blume said the location in eastern Europe would soon be announced, while the carmaker was also looking for a battery plant in Canada.

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