* Amber wants to split chairman and CEO functions
* Nexans shares down 44 pct in three years
PARIS, April 15 ISS Proxy Advisory Services is
advising shareholders in Nexans to back a hedge fund
resolution to dismiss its Chairman and Chief Executive Frederic
Vincent from the board at the French cablemaking company's May
15 annual meeting.
Corporate governance adviser ISS, whose recommendations can
influence the voting of institutional shareholders, said it
agreed with some of 5.5 percent shareholder Amber Capital's
complaints about the way the company is run.
Shareholders have the power to vote Vincent off the board
and thereby end his reign as chairman. However, only the board
itself has the power to remove him as CEO.
Nexans made a loss in 2013 and skipped its dividend for the
year after being forced to raise new share capital in October,
blaming a lack of growth in Europe and industry overcapacity.
Amber, the Paris-listed company's fourth-largest
shareholder, has said it has little chance of success with the
vote, but decided to submit the resolution in protest against
what it sees as poor performance and failure to keep up with
main competitor Prysmian since Vincent took the helm in 2009.
The resolution is based on an Oct. 31 request from Amber to
split the chairman and CEO functions, in line with U.S. and
British corporate governance norms. That request was denied two
weeks later. ISS said Nexans has also since recommended that
shareholders reject the resolution.
"Removing Frederic Vincent as director appears to be the
most direct and effective way for shareholders to obtain
separation of the two functions of chairman and of CEO, which
would be considered positive," said ISS in its written
recommendation dated April 25.
"The dissident shareholder is not asking for board
representation, to change the board to a two-tier structure, or
to implement a new strategy," it said. There was therefore
"little if any downside risk" to removing Vincent as director.
Nexans could not be immediately reached for comment but on
April 15, after news of the planned resolution, a spokeswoman
said: "These issues will be dealt with at the AGM and management
has no comment to make at this stage".
(Writing by Andrew Callus; editing by Andrew Roche)