Volkswagen investors revive governance grumbles even with despite special dividend

BERLIN – Volkswagen shareholders renewed their criticism of CEO Oliver Blume’s dual roles on Friday, even as they rubber stamped a roughly 9.6 billion euro ($10.2 billion) special dividend following the Porsche AG listing.

Blume, who became group chief executive in September, has continued as CEO of luxury brand Porsche even after its listing, prompting concerns among some investors about the pressures on his time and potential conflicts of interest.

At a shareholder meeting to approve the special dividend, Blume said Volkswagen 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 on Friday, with 99.9% 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 Volkswagen’s valuation.

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

“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 $103.60 per share since opening at $87.44 on Sept. 29, while Volkswagen shares have risen just 3.9 percent to $141.56 in the same period.

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

Volkswagen 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 Volkswagen 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 United States have stirred unease among European policymakers that investments planned in Europe will instead be made abroad.

Volkswagen was weighing up locations based not only on the promised number of plants per region – totaling 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.

Still, 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.