FRANKFURT (Reuters) – Bayer’s (BAYGn.DE) executive board won a clear vote of confidence from shareholders on Tuesday, following a rebuke last year over the handling of lawsuits related to a weedkiller.
FILE PHOTO: A bridge is decorated with the logo of a Bayer AG, a German pharmaceutical and chemical maker in Wuppertal, Germany August 9, 2019. REUTERS/Wolfgang Rattay
Of the valid votes cast at this year’s annual general meeting (AGM), 92.6% were in favour of ratifying the executive board’s business conduct during 2019, even though a settlement with plaintiffs has yet to be negotiated.
About 7.4% voted against that motion.
Last year, the German company’s handling of a wave of U.S. lawsuits claiming its glyphosate-based weedkillers cause cancer prompted a majority of shareholders to cast a vote of no confidence in the executive board.
At Tuesday’s vote on management, there was a 7.6% abstention rate among shareholders that were registered participants at the AGM, which was held virtually as gatherings are banned due to the coronavirus pandemic.
In the run-up to the event, leading shareholder advisory firm ISS had recommended a vote in favour of management, seeing no evidence that fiduciary duties were breached in 2019.
Glass Lewis, another major advisory firm, had said investors should abstain because glyphosate proceedings were still pending.
The vote of confidence, which wraps up every German AGM, has no bearing on management’s liability or tenure, but it is treated as a key gauge of investor sentiment.
Bayer shares have plunged by about a third since August 2018, when the company lost the first U.S. lawsuit claiming Roundup – acquired via the $63 billion takeover of Monsanto – causes cancer.
Over that past 12 months, it has stepped up efforts to settle claims and appointing a veteran litigation lawyer to advise the supervisory board – though the coronavirus crisis has also slowed talks with plaintiffs’ lawyers.
“We also took to heart the disappointing voting results at last year’s Annual Stockholders’ Meeting. We … took on board the criticisms expressed and worked to improve,” Chief Executive Werner Baumann told investors earlier on Tuesday.
Mutual fund firm Deka Investment, one of Bayer’s largest German shareholders, was among those that shifted to voting yes from no last year, acknowledging the company’s efforts to come to terms with plaintiffs.
“But with this vote we make an urgent call to bring clarity soon in the matter of litigation,” said Ingo Speich, Deka’s head of sustainability and corporate governance.
Bayer on Monday said the economic downturn and need to preserve cash meant it was taking a tougher stance in talks to settle glyphosate claims, even as its earnings rose.
Reporting by Ludwig Burger; Editing by David Evans and Mark Potter