5,000 shareholders attended Vivendi Universal’s Annual Shareholders Meeting which was held on 24 April 2002. The meeting will be remembered in French corporate history as shareholders refused two out of the 18 items on the agenda : an executive stock option plan and an authorisation to increase share capital without pre-emptive rights for existing shareholders. Both resolutions failed to obtain the two-thirds majority needed in order to be accepted. The stock option plan received only 59% of votes while the capital increase authorisation received 57%.
The stock option plan presented authorised the Board of Directors to grant top executives the option to subscribe to a maximum of 55 million Vivendi Universal shares, which corresponds to approximately 5% of issued share capital. By refusing the plan, shareholders indicated their disagreement with the granting of an exercise price below the market price of company shares. Ethos refused the plan considering that options granted at an exercise price below market price is contrary to long-term profit sharing schemes for company management.
As soon as the result of the vote was known, Jean-Marie Messier, Chairman and CEO of the company, announced his intention of calling an extraordinary general meeting in order to vote on a revised stock option plan, a vital element in order to hire and retain talented and competent executives.
Finally, shareholders refused to grant authorisation to increase the share capital without pre-emptive rights. The resolution planned a maximum increase of 84% compared to present share capital which would have the effect of considerably diluting the financial and voting rights of existing shareholders. Ethos also opposed this resolution which is contrary to corporate governance codes of best practice.
Last minute flash : On 26 April, Vivendi Universal announced irregularities in the voting system at the Annual General Meeting. During a meeting on 29 April, the board of directors wil decide whether to call a new shareholders’ meeting in order to vote again on each point of the agenda.
