Status: 07/22/2021 4:17 p.m.
At today’s Annual General Meeting, Volkswagen has again to hear severe criticism from shareholders because of its idiosyncratic ownership structure. But who actually has the say in the group?
Even six years after it was exposed, the diesel scandal still dominates Volkswagen’s shareholders’ meetings. This time it’s about a comparison with the former CEO Martin Winterkorn. He should pay eleven million euros in damages. Too little, say many shareholders. Financial investors such as the fund company of the Volks- und Raiffeisenbanken, Union Investment, primarily blame the unusual ownership structures for the inadequate comparison with Winterkorn in their eyes. The reason is the lack of independence of the supervisory board.
Volkswagen has only half learned the lesson from the diesel scandal, explained Janne Werning from the Union Investment fund company in his speech at the virtual general meeting that had been distributed in advance. “VW is playing a global pioneering role in green electromobility, but poor corporate governance is still the Group’s Achilles heel.” Corporate governance means the rules of good corporate governance. Ingo Speich from the Sparkassen fund company, Deka, also accuses the supervisory board of a lack of independence.
Families have a majority of the voting rights
According to stock corporation law, shareholders can overturn the agreement made with Winterkorn if ten percent of the share capital vote against it. The shareholders really don’t have to fear the wrath of investors. In view of the majority in the Wolfsburg-based group, all items on the agenda should be approved with a large majority.
Because more than 90 percent of the ordinary shares are in the hands of the main shareholders, above all the Stuttgart-based Porsche Automobil Holding SE. It belongs to the two Austrian families Piech and Porsche. They own almost 32 percent of all shares in the VW Group and hold 53.3 percent of the voting rights. This means that one of the world’s largest car companies remains majority-owned by the family.
Protected from hostile takeovers
The other large shareholders include the state of Lower Saxony, which owns 11.8 percent of the shares and 20.0 percent of the voting rights, and the Emirate of Qatar (14.6 percent of the shares, 17.0 percent of the voting rights). The remaining shareholders, including large domestic and foreign fund companies, as well as numerous private investors, hold 9.7 percent of the voting rights, although they own over 40 percent of the shares. This disproportion is explained by the fact that 206 of a good 500 million shares consist of non-voting preference shares that are traded on the stock exchange and are therefore freely accessible.
Thanks to this peculiarity and also thanks to the so-called VW law, which grants the state of Lower Saxony a blocking minority, Volkswagen is well protected from hostile takeovers. But not before disputes between the founding families Porsche and Piech. Above all, Ferdinand Piech, a grandson of the company founder Ferry Porsche and longstanding CEO of the VW Group, caused a major conflict between the families at the time. He had tried in vain to gain the upper hand in the family after the departure of Porsche boss Wendelin Wiedeking.
Broker Louise Kiesling
The dispute between the two families has a long tradition and, according to experts, is one of the most constant things that the Porsche and Volkswagen companies have produced since their foundation. Since the death of Ferdinand Piech two years ago, however, things have calmed down. That is also due to Louise Kiesling. The 64-year-old is the sister of Ferdinand Piech, but took on the family name of her husband Andreas Kiesling when she married – and is therefore unknown to the general public.
But as a family representative, she has been on the Volkswagen Supervisory Board since 2015 and is aiming for re-election for another five years at today’s Annual General Meeting. According to insiders, she should own around six percent of the shares in Stuttgart-based Porsche Holding, which has the majority of the voting rights in Volkswagen. This makes Kiesling one of the most influential members of the supervisory board of Europe’s largest car company – and a mediator between the families.
Because although Louise Kiesling belongs to the Piech clan due to her origins, she has bundled her shares with the Porsche side. This means that the Porsches always have a little more power than the Piechs when it comes to voting. Kiesling follows her mother’s decision to form a pool with the Porsches. The current ownership structure should therefore remain in place for the time being.