Amec invites BM&F Bovespa, Glass Lewis & Co., and ISS to debate “superpreferred” shares

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The Association of Capital Markets Investors (AMEC), invited BM&F Bovespa, Glass Lewis & Co., and Institutional Shareholder Serivces, ISS, to engage in a debate on “superpreferred” shares to stir the possibility of revisiting their respective stand on the matter.
Recently, Amec expressed its concern with the new corporate structure, approved by BM&F Bovespa, which includes the issuance of super non-voting shares – shares with no voting rights, but filled with disproportionately high economic value. Already implemented by two companies accepted by BM&F Bovespa’s Level 2 Segment, Azul and Gol Linhas Aereas, the structure may threaten the credibility of the Novo Mercado, for it injures good practices of corporate governance.
Amec’s Board of Directors met on May 27 to discuss the issue and to deliberate the issuance of the Letter from the President 04, addressed to BM&F Bovespa, the self-regulatory entity responsible for approving the structure for a Level 2 company, as well as to two proxy advisors, Glass Lewis & Co. and ISS, which supported Gol’s structure.
In the document, Amec emphasizes the principle of “one share, one vote” as the basis for any initiative that pursues better practices of corporate governance. In addition, Amec understands such a principle, responsible for the creating of the whole system, to be dead, when allowing companies listed on Segment 2 of Corporate Governance to adopt strategies that largely multiply the controller’s possibility to take off, with no threats to fix its control.
For BM&F Bovespa, Amec urged a reflection on the impacts of the new structure and on the preservation of the credibility of the Novo Mercado. For Glass Lewis and ISS, the Association of Capital Markets Investors expressed its disagreement with the support given to the structure, and invited both companies to a reflective debate, so that, eventually, the two proxy advisors revisit their decision on similar cases that may arise in the future. Amec stressed that, in the case of Glass Lewis, in particular, the acceptance of the structure seems to contradict directly the principles defended by their own policies vis-à-vis “one share, one vote.”
Click here to access the Letter from the President 3A (Portuguese), 3B (English), and 3C (English), from 2015.