Piaggio | 2016

On 14 April 2016, for the sixth consecutive year, Etica SGR voted at the general meeting of Piaggio, the Italian motorcycle manufacturer operating in the scooter, motorcycle and light transport vehicle segment of the two-wheeler market with various brands including Moto Aprilia, Piaggio, Vespa, Moto Guzzi and Ape.

This year, Etica SGR again took the floor at the meeting to bring management’s attention to certain aspects related to the company’s sustainability, with a view to fruitful and lasting dialogue over time.

Although profit declined at group level, Etica SGR welcomed the positive performance registered by certain economic indicators, including turnover growth in all the main regions in which the group operates and in all of its business lines. However, Etica SGR abstained from the vote on the first agenda item specifically with regard to the distribution of earnings, due to a payout ratio not in line with point 1.7.1 of the Guidelines on Active Shareholding, also in light of the increase (albeit slight) in corporate debt and the fact that the reserve for the distribution of earnings had been drawn upon. This does not appear to be consistent with an investment policy that is sustainable in the medium and long term, particularly with a view to the company’s financial stability.

Etica SGR voted against the second item on the agenda, relating to the remuneration policy, after making a negative assessment due to a lack of clear and detailed information on the performance objectives to which the variable component set out in Piaggio’s policy is linked, even though this was not awarded in 2015. Moreover, there was no information provided relating to the minimum thresholds for achieving objectives, reference to the average market remuneration, the presence of ESG indicators for the variable components and the ratio of the CEO’s salary to the average salary of employees. Moreover, none of the improvements suggested in previous years by Etica SGR had been implemented.

Etica SGR abstained from the third item discussed in the meeting regarding the request for authorisation to buy and sell own shares, due to a lack of detailed information relating to the entrepreneurial aims and strategy that Piaggio intends to pursue in relation to the authorisation to purchase own shares.

At the meeting, updates were requested on the employment situation at Piaggio’s Italian facilities, which Etica SGR is watching closely, also in light of the loan received from the EIB for research and development projects to be carried out in Italy. Etica SGR welcomed Piaggio’s engagement in terms of environmental issues, which is in line with the challenges launched by the new UN Sustainable Development Goals and the initiatives proposed by the CDP, to which Piaggio adheres, to improve management of the environmental impact of its production activities. Etica SGR asked the company to pay increasing attention to the management and assessment of its suppliers, including in relation to human rights issues along the supply chain, since this is regarded as an increasingly essential part of the assessment of the business by investors.

 

VOTING INTENTIONS:

Agenda For Against Abstention Etica Sgr Guidelines ref.
1)   Financial statements of Piaggio & C. S.p.A. at 31 December 2015; Directors’ report on operations for 2015 and proposed appropriation of earnings for the year; Board of Statutory Auditors’ report; Independent Auditor’s report; related and consequent resolutions; presentation of the Piaggio Group’s consolidated financial statements at 31 December 2015 and relative reports.
X 1.7
2)   Report on remuneration pursuant to Art. 123-ter of Legislative Decree 58/1998. Related and consequent resolutions.
X 1.6
3)   Authorisation to buy and sell own shares, pursuant to the combined provision of Articles 2357 and 2357-ter of the Italian Civil Code, as well as Art. 132 of Legislative Decree 58/1998 and the relative implementation provisions, subject to revocation of the unexecuted portion of the authorisation conferred by the ordinary shareholders’ meeting of 13 April 2015. Related and consequent resolutions.
X 1.5
Engagement Italian companies
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