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RENAULT, Governance and Chairman’s compensation issues

The other emblematic topic of the 2016 campaign will be Renault's governance developments following the 2015 change in capital distribution.  In order to force Renault to adopter double voting rights, the French state, which owned 15% of the automotive group's shares in 2015, decided to increase its investment to nearly 20%. Nissan, which owns 15% of the French group under its Alliance with Renault, without voting rights (although Renault owns 43.4% of Nissan with voting rights), saw this move by the French government as an attempt to control the French group's destiny. This forced Renault's management to renegotiate their agreement with the state, by introducing a limitation of the state's voting rights (17.9% if the AGM attendance rate is lower than 70%, 20% if it is higher) and to adjust the balance with Nissan by modifying the Japanese company's rules, restricting the powers of the directors appointed by Renault to Nissan's Board. This shift in the governance of both automotive manufacturers plays into the hands of Carlos Ghosn, CEO of Renault and Nissan, who currently stands alone at the helm, with no second in command at Renault or Nissan. This probably explains the lack of perspicacity (if not courage) of Renault's Remuneration Committee, which granted Carlos Ghosn a remuneration in excess of €7 million for the 2015 tax year, supplemented by that granted by Nissan's Board, which exceeds €8 million. During Renault's 2016 annual general meeting, 54% of the shareholders voted against Carlos Ghosn's remuneration (say on pay), but the Board of Directors which met shortly after that decided to disregard this advisory vote by maintaining the CEO's 2015 remuneration. 

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