SCOR Rejects “Unfounded” Calls for Kessler to Leave Board

French reinsurer SCOR has called on its shareholders to reject a draft resolution that was presented by investment management firm CIAM yesterday, which recommended that Denis Kessler be removed from the Board of SCOR.

Source: Reinsurance News | Published on March 28, 2019

CIAM contended that Kessler should step down from his role as Chairman of SCOR and continue as CEO without a Board position, citing issues such as conflict of issue and excessive remuneration.

However, SCOR argues that CIAM’s call for a vote consists of “seriously unfounded, inaccurate and misleading statements with the purpose of destabilizing SCOR.”

The activist fund has previously been embroiled in a number of disputes with SCOR and Kessler following the reinsurer’s rejection of an €8.2 billion takeover bid from Covéa last year.

The Board of Directors of SCOR has unanimously reiterated its full support for Kessler and Lead Director Augustin de Romanet, who CIAM also called on shareholders to remove.

It claimed that the combination of the positions of Chairman and CEO has allowed SCOR to “benefit from efficient decision-making process and a strategic alignment of its governance bodies,” noting the Kessler’s office was renewed with 80.60% of the shareholder vote in April 2017.

SCOR also claimed that its model was in line with corporate governance practices set forth in the AFEP-MEDEF code, and is used by 60% of the largest French companies.

It added, contrary to CIAM’s case, that the Board consisted of 81.8% independent directors, and that the company’s management was shared by three effective managers, in line with Solvency II.

Additionally, the reinsurer highlighted that Kessler’s remuneration, which CIAM claimed was disproportionately high compared with SCOR’s performance, had been approved by shareholders in April 2018 with 87.92% of favourable votes.

At almost €9 million, CIAM noted that SCOR ranked 2nd highest amongst the largest reinsurers in terms of annual CEO remuneration, despite ranking 6th in terms of market cap.

SCOR countered that Kessler’s remuneration was aligned with market price and that the company’s turnover had been multiplied by six times, reaching €15.3 billion, since Kessler’s appointment in 2002.

The company also reiterated its rationale for rejecting the acquisition attempt from Covéa and for pursuing legal action against the company and its CEO, Thierry Derez, for breach of trust.

Finally, SCOR questioned the motivation behind CIAM’s repeated public attacks against the its management, noting that the fund’s 0.94% stake in SCOR had been acquired immediately after Covéa first announced its intentions to take over the company.

“This demonstrates that CIAM’s investment in SCOR is speculative and short-term,” the group stated. “SCOR regrets the repeated attacks of CIAM, to which the Group has always responded, and whose motivations are against the corporate interest of SCOR.”