By Nicola Leske
FRANKFURT, Feb 9 (Reuters) - Infineon shareholders meet on Thursday in Munich to settle a rare German proxy fight, between supporters of an old-boy network and activist minority investors pressing for a fresh start.
At stake is who will lead the chipmaker's supervisory board once Chairman Max Dietrich Kley steps down this week. The outcome may drive another nail in the coffin of the corporate culture that has become known as Germany Inc.
Bucking the old German corporate culture, which has traditionally rested on a clubby network of executives, foreign investors are increasingly demanding a say in company affairs, and Infineon faces formidable opposition to what had seemed a done deal.
Kley has thrown his weight behind Klaus Wucherer, 65, while UK pension fund Hermes, several other investors and influential U.S. investor service group RiskMetrics have gone public in their opposition to the potential successor.
They argue that Wucherer served on the board for years and watched while Infineon shares plumbed new depths.
The rebels have proposed their own board candidate: outsider Willi Berchtold, finance chief of Germany's third-largest car parts supplier, ZF Friedrichshafen.
Spun off from Siemens in 1999, Infineon has seen its share of management squabbles, poor business decisions and quarter after quarter of losses, but now seems poised for better times after a year of restructuring.
Hermes says the time is right to choose someone like Berchtold to change the culture at Infineon, whose board was long dominated by former Siemens executives or confidants.
Chief Executive Peter Bauer, who supports Wucherer, is also a former Siemens manager.
NO JOY FOR INVESTORS
Wucherer, who has been an Infineon board member for almost a decade, joined from Siemens and is viewed as part of the old Siemens system that was tarnished by a corruption and bribes scandal from which the company is only now emerging.
Wucherer himself was never charged with any wrongdoing but he opted to settle with Siemens and pay 500,000 euros ($683,100) in damages, arguing that it was not an admission of guilt but rather a way to avoid potentially even costlier legal fees.
Berchtold is no newcomer to the chip industry. He began his career at IBM in 1978 as a distribution assistant and moved up the ranks to become managing director at IBM Germany.
In 1998 he joined smart-card maker Giesecke & Devrient, which buys chips from Infineon. He also helped found Germany's IT association Bitkom in 2002.
Berchtold, 59, has said he will step down as ZF's CFO should he become chairman to avoid any potential conflicts of interest.
Infineon supplies chips to ZF Friedrichshafen as well as rivals such as Continental and Volkswagen.
Critics of the Hermes plan argue that Berchtold has yet to present a concept for Infineon's future. He was quoted recently as saying that he did not intend to dismantle the group.
Wucherer has offered critics an olive branch by saying he would only stay on as chairman for a year to give Infineon time to search for a suitable external candidate.
The Financial Times Deutschland paper has reported that a third candidate -- board member Hans Ulrich Holdenried -- may emerge as a candidate should Wucherer not find a majority.
At last year's AGM, investors representing only 40 percent of the company's capital were present and chairman Kley squeaked through by a margin of 0.05 percentage points.
Infineon shareholders have had little joy with their investment in the company, which went public in 2000. Its stock now trades below 4 euros per share versus 35 in 2000, and investors have yet to get a dividend.
(Editing by Rupert Winchester) ($1=.7320 Euro) Keywords: INFINEON/AGM (nicola.leske@thomsonreuters.com; +49 69 7565 1214; Reuters Messaging: nicola.leske.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
FRANKFURT, Feb 9 (Reuters) - Infineon shareholders meet on Thursday in Munich to settle a rare German proxy fight, between supporters of an old-boy network and activist minority investors pressing for a fresh start.
At stake is who will lead the chipmaker's supervisory board once Chairman Max Dietrich Kley steps down this week. The outcome may drive another nail in the coffin of the corporate culture that has become known as Germany Inc.
Bucking the old German corporate culture, which has traditionally rested on a clubby network of executives, foreign investors are increasingly demanding a say in company affairs, and Infineon faces formidable opposition to what had seemed a done deal.
Kley has thrown his weight behind Klaus Wucherer, 65, while UK pension fund Hermes, several other investors and influential U.S. investor service group RiskMetrics have gone public in their opposition to the potential successor.
They argue that Wucherer served on the board for years and watched while Infineon shares plumbed new depths.
The rebels have proposed their own board candidate: outsider Willi Berchtold, finance chief of Germany's third-largest car parts supplier, ZF Friedrichshafen.
Spun off from Siemens in 1999, Infineon has seen its share of management squabbles, poor business decisions and quarter after quarter of losses, but now seems poised for better times after a year of restructuring.
Hermes says the time is right to choose someone like Berchtold to change the culture at Infineon, whose board was long dominated by former Siemens executives or confidants.
Chief Executive Peter Bauer, who supports Wucherer, is also a former Siemens manager.
NO JOY FOR INVESTORS
Wucherer, who has been an Infineon board member for almost a decade, joined from Siemens and is viewed as part of the old Siemens system that was tarnished by a corruption and bribes scandal from which the company is only now emerging.
Wucherer himself was never charged with any wrongdoing but he opted to settle with Siemens and pay 500,000 euros ($683,100) in damages, arguing that it was not an admission of guilt but rather a way to avoid potentially even costlier legal fees.
Berchtold is no newcomer to the chip industry. He began his career at IBM in 1978 as a distribution assistant and moved up the ranks to become managing director at IBM Germany.
In 1998 he joined smart-card maker Giesecke & Devrient, which buys chips from Infineon. He also helped found Germany's IT association Bitkom in 2002.
Berchtold, 59, has said he will step down as ZF's CFO should he become chairman to avoid any potential conflicts of interest.
Infineon supplies chips to ZF Friedrichshafen as well as rivals such as Continental and Volkswagen.
Critics of the Hermes plan argue that Berchtold has yet to present a concept for Infineon's future. He was quoted recently as saying that he did not intend to dismantle the group.
Wucherer has offered critics an olive branch by saying he would only stay on as chairman for a year to give Infineon time to search for a suitable external candidate.
The Financial Times Deutschland paper has reported that a third candidate -- board member Hans Ulrich Holdenried -- may emerge as a candidate should Wucherer not find a majority.
At last year's AGM, investors representing only 40 percent of the company's capital were present and chairman Kley squeaked through by a margin of 0.05 percentage points.
Infineon shareholders have had little joy with their investment in the company, which went public in 2000. Its stock now trades below 4 euros per share versus 35 in 2000, and investors have yet to get a dividend.
(Editing by Rupert Winchester) ($1=.7320 Euro) Keywords: INFINEON/AGM (nicola.leske@thomsonreuters.com; +49 69 7565 1214; Reuters Messaging: nicola.leske.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2010 AFX News
