Image: IVA
The manner in which meetings of the board of directors and shareholders in listed companies are to be held in the future is to be reformed in the Shareholders’ Meetings Act. A draft by Justice Minister Alma Zadic (Greens) is available. The assessment runs until May 25th.
The general meetings (AGM) should therefore in future be allowed to be held physically, hybrid or completely virtually, as was permitted in the Corona period as a bridging regulation. This is now to be converted into permanent law. According to Zadic, the advantage is a push to modernize corporate law. Small shareholders in particular are fighting back, they fear for their right to have a say and bring up the discrimination of older shareholders in particular. Florian Beckermann, President of the Interest Group for Investors (IVA), argues in a statement: “Extremely low numbers of participants, shortened transparency and control options as well as diverse possibilities of abuse weaken shareholders’ rights profoundly. Some people are completely excluded.”
The planned “statute threshold” – i.e. if more than 75 percent of the shareholders want to change the statutes so that only virtual general meetings are held – will undermine the protection of minorities. In Austria, listed corporations usually have strong and large core shareholders who could easily exceed this threshold. Conversely, the threshold of ten percent of the share capital that can require a general meeting to be attended is too high. For example, Erste Group would need capital of EUR 1.4 billion to clear this hurdle. Beckermann: “The purely virtual general meeting for public companies must therefore be rejected in this form.”
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