DaimlerChrysler Shareholder Proposals, 2007 Annual Meeting

We at Allpar felt that news coverage of the various proposals, particularly the name change, have been taken out of context, and wished to provide a thumbnail view of the full range of proposals being brought before DCX’s April 4 meeting. We have heavily summarized the proposals and reasons. It seems some people are very angry, and not just at Chrysler. Additional note: all shareholder resolutions failed. The name change failed with about 98.4% of stock voting against.

Proposal

Reason

Change the name to Daimler-Benz by March 31, 2008 “Maintaining a corporate name that evokes associations with the failure of the business combination with Chrysler is detrimental to the image of the corporation and its products.
This is all the more true as unflattering nicknames such as Doting Daimler, Daimler-Crisis or
even Crime-ler have long been in circulation. ... If a proper separation cannot be effected within one year,
this would only serve to underscore the need to remove this affliction on the image from the corporation’s name.”
Make annual meetings in Stuttgart if the last two weren’t in Stuttgart People in Stuttgart want to fight with DCX leaders
Make it possible for shareholders to replace the meeting chair for specific items Prevent certain people from railroading meetings as Kopper did to get the Chrysler acquisition through
Impose an age limit of 60 on the Supervisory Board “The clearly over-aged Supervisory Board left the last two Chairmen of the Board of Management in place for far too long instead of replacing them in time.”
Shareholder reps on the Supervisory Board must not be on the management board of a DAX 30 corporation, or on the supervisory board of two DAX 30 corporations The time and attention commitment is too great to allow representatives to spread themselves so thin. “This is the only way to explain the fact that no respected member of the German business community could be found who was willing to put the obvious management deficiencies at the top levels of the corporation in order before those responsible lost their own will to continue.”
Shareholders should be able to contradict tributes to board retirees Boy, did Zetsche praise Schrempp, when Schrempp was very, very naughty indeed
Separate counting of votes so individuals vote spearately from proxies Institutional investors are often subject to conflict of interest. Otherwise they'd never have ratified the actions of the goofy DCX Boards. First, have those with no conflict of interest votes, so those who do have conflicts can be shamed and sued.
Prepare verbatim minutes DCX used to do this. “It is possible that the management does not wish to be held to any comments it makes in the Annual Meeting.”
Become a European Stock Corporation This can reduce the size of the unwieldy Supervisory Board and reduce the power of the German unions
The Board Response to the above proposals: The DaimlerChrysler name is established all over the world. ... the organizational form is fine... keep it the way it is.

Audit the Management and Supervisory Boards for negligence in not demanding damages from or reviewing compensation of those whose lack of diligence resulted in Daimler paying a 30% premium for Chrysler

The DCX boards have ignored the Stuttgart District Court's recommendation that both Daimler and Chrysler managements be investigated for their poor evaluation of the merger.

Audit the Supervisory Board for negligence in issuing management 20.5 million options exercisable at 34.40 Euro when the stock was at a multi-year low. 

Supervisory Board  should not have issued options until the market stabilized.  They profited at the expense of shareholders.

Audit whether Schrempp’s statementsmake him liable for DCX’s expenses in settling lawsuits; whether the Board could have, or can, assert claims against him; and whether they are liable for not asserting them.

The DCX liability insurance is insufficient to cover the settlement amount and lawyers’ fees.

Audit whether any DCX Board Members knew of transactions now being investigated by the SEC and DOJ, and if the lack of oversight on their part allowed the transactions to occur. 

The Company has not addressed the investigations and press speculation is that DCX Management is avoiding entering the U.S because of them.

Audit whether Dr. Zetsche and others perjured themselves regarding fraudulent grey-market transactions in the trial of Gerhard Schweinle, and whether there was an attempted cover-up.

 

The appeals court questioned whether DCX employees were really unaware of the transactions.

Audit the Supervisory Board’s oversight of the administration and compensation of Schrempp, and compensation for services provided by his family.

Compensation for the former Board of Management and their dependents has risen while that of the current board has fallen.  Schrempp’s compensation is kept secret.

Board response: An audit is useless.  Other parties are investigating and we don’t think they’ll find anything more than they have. The Supervisory Board acts in the interests of the corporation; compensation is explained in the annual report.

 

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