Fondul Proprietatea calls for more independent board members, higher dividends at BRD


Investment fund Fondul Proprietatea, which holds a 3.63% stake in BRD Groupe Societe Generale (BRD), together with another shareholder of the bank, outlined several resolutions to be discussed at the upcoming general shareholders meeting of the lender.

The resolutions call for the appointment of board members based on the cumulative voting method, the optimization of BRD’s capital structure, and the approval of a higher dividend for shareholders than the one proposed by the bank’s board of directors.

Fondul Proprietatea says the appointment of board members based on the cumulative voting method is expected to lead to a higher number of independent non-executive board members, in this way better reflecting the diversified institutional investor base that BRD has. Currently, seven of the nine board members hold or have held at some point in their career an executive position with BRD or Societe Generale Group.

At the same time, the fund proposed Cezary Smorszczewski as a candidate for an independent member position on the board of BRD. With extensive experience in the banking sector, Smorszczewski is a CEO of Private Equity Managers, and has served as a member in the boards of companies such as ATM Poland, a data center company, Dotpay, an on-line payment services provider, or Mobiltek, a maker of mobile applications. He was also one of the co-founders of Alior Bank, a start-up Polish bank that carried out a USD 2 billion IPO in 2013.

“An increased number of independent board members should be beneficial to the bank and all its shareholders, by providing the board with fresh perspectives on strategy and market opportunities, as well as enhance market trust in the capacity of the board to oversee executive management,” said Greg Konieczny, Fondul Proprietatea CEO and Portfolio Manager.

Fondul Proprietatea also asked for the distribution of a gross dividend per share out of 2016 net profit of RON 1.045 per share, corresponding to a dividend pay-out of 100% out of the stand-alone BRD net profit.

BRD’s Board of Directors previously proposed a dividend corresponding to a pay-out ratio of 70% of the bank’s individual 2016 net income (RON 728 million), subject to a favorable vote by the annual general meeting of shareholders.

The BRD general shareholders meeting is scheduled for April 20. French group Societe General holds a 60% stake in BRD, with the remaining shares being split among institutional and individual investors.

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