Dissident shareholder groups in Germany have placed motions on the agenda of DaimlerChrysler's annual meeting calling for the ouster of board members and the rejection of a stock option plan.
The groups admit they're tilting at windmills and don't have the votes to dethrone management at the annual shareholder meeting on April 11 in Berlin. But the point needs to be underscored that management has bungled the acquisition of the former Chrysler Corp., they say.
'Many shareholders are furious at what management has done. But the big shareholders will still be passive,' said Ekkehard Wenger, a shareholder activist and economics professor at the University of Wurzberg, Germany.
He said DaimlerChrysler isn't worried about the dissidents because management has the backing of Deutsche Bank, its biggest shareholder. Deutsche Bank owns 12 percent of DaimlerChrysler's stock. The Kuwait Investment Authority is the second largest holder with 7 percent.
'I am certain Deutsche Bank has been assured of the support of other institutional investors,' Wenger said in an interview last week. 'There will be a small margin of negative votes, 1 to 5 percent, but no shareholder revolt.'
The German Association for the Protection of Small Shareholders has moved that the entire supervisory board, including CEO Juergen Schrempp, be discharged, said Reinhild Keitel, the group's spokeswoman in Frankfurt.
She said the group does not know how many members it has because a new German law gives only the corporation access to the names of its stockholders.
'They are responsible for the disaster with Chrysler and ownership problems with Mitsubishi. Our shareholder value has fallen tremendously. The board should have acted sooner,' Keitel said.
DaimlerChrysler stock hit a high of $108 a share in late 1999 on the New York Stock Exchange and has spiraled downward since. It closed at $45.59 on Friday, March 16.
Several individual shareholders and another group, the Association of Critical Shareholders in Germany, are calling for rejection of the company's financial statements for 2000. In effect, they are demanding a vote of no confidence in management.
'Due to numerous misjudgments by the board of management, the takeover (of Chrysler) has failed and has caused great detriment to the employees and shareholders of both companies,' said Juergen Graesslin, a shareholder from Freiburg, Germany, last week.
'Juergen Schrempp must be dismissed by the supervisory board.'
Other shareholders are calling for the rejection of a e260 million, or $232.5 million, plan to repurchase 10 percent of the company's shares.
In a six-page letter to shareholders that addresses all 26 motions on the meeting's agenda, DaimlerChrysler says only that the dissidents' allegations are 'incorrect and without any basis.'