CORPORATE ACTIONS REQUIRERING SHAREHOLDERS APPROVAL.
The routine corporate actions requiring shareholder approval under the German model are:
1.
2.
3.
4.
5.
Allocation of net income (payment of dividends and allocation to reserves).
Ratification of the acts of the management board for the previous fiscal year.
Ratification of the acts of the supervisory board for the previous fiscal year.
Election of the supervisory board.
Appointment of auditors.
Approval of the acts of the management board and supervisory board are basically a “seal of approval”
or “vote of confidence.”
Shareholders do not possess the authority to alter the size or composition of the supervisory board.
These are determined by LAW, in contrast with the Anglo-US and the Japanese model.
Other common corporate actions which also require shareholder approval include:
1. Capital authorizations (which automatically recognized preemptive rights, unless revoked by
shareholders’ approval):
2. Affiliation agreement with subsidiaries:
3. Amendments to the articles of association and/or charter (ex. A change of approved business
activities);
4. Increase of the aggregate compensation ceiling of the supervisory board.
5. Non-routine corporate actions:
* Merges
* Takeovers
* Restructuring
Shareholders proposal are common in Germany. Following announcement of the agenda for the
meeting, shareholders may submit in writing two types of proposals. A shareholder counter
proposal opposes the proposal made by the management board and/or supervisory board in an
existing agenda item and presents an alternative.