A Vale, B3’s largest company, valued at R $ 485 billion, will face opposition to approve the negative voting system proposed to shareholders for the election of the board of directors: voting recommendation consultants. Both the ISS, which leads the American market, such as Glass Lewis, with more influence over European funds, recommend the rejection of the item that deals with the subject. The reports were released on Friday.
Vale’s meeting is scheduled for the next 12th. The mining company proposed a reform of its bylaws, the main tool with the rules of governance of a company. In it, he wants to implement the system of voting against or negative and the election of the board always name by name, without a slate system – among several other suggestions.
Glass Lewis, for example, pointed out that it does not reject the negative vote model, adopted in some other markets. However, he said he feared possible misuse of this tool. According to the consultancy, Vale should present in the future another newsroom, which will be able to resolve the concerns shown so far.
The voting model, an innovation in the Brazilian market, was suggested by the nomination committee formed by the company in July last year, with Pedro Parente and Alexandre Silva – none of them board members. The committee’s work is assisted by Paulo Aragão, a founding partner of the BMA office. The two renowned market executives are working to form a suggested list with names for the mining company’s board, which will take effect at this year’s annual general meeting – which has not yet been called.
Sources close to Vale explained that the suggestion was made after Vale’s contact with its investors, especially foreigners. The ISS and Glass Lewis reports will therefore be a test of the managers’ independence. Currently, 54% of Vale’s capital is in the hands of foreign investors – 38% dispersed and 16% divided into almost equal slices between BlackRock, Capital World Investor and Capital Research Global Investors.
The innovation of the negative vote faced resistance inside and outside Vale. Inside, independent directors Marcelo Gasparino and Isabela Saboya voted against the suggestion. The Association of Capital Market Investors (Amec) also did not approve the proposal and Mauro Rodrigues da Cunha, former president of the association and the Brazilian Institute of Corporate Governance (IBGC) also made harsh criticisms.
The matter ended up in the Securities and Exchange Commission (CVM), after a complaint made by Gasparino to the regulator. So far, however, there has been no public statement by the regulator on the case.
The board that will be elected in this year 2021 marks Vale’s transition to a capital company fully dispersed on the stock exchange, since the main shareholders and former controlling shareholders Previ, Petros, Funcef, in addition to Bradespar and Mitsui, do not have any other type of agreement that binds them. Together, they still add up to close to 20% of the capital. The last deal expired in November, and was a transitional version made after the company migrated to B3’s Novo Mercado.
On Friday, Vale released the balance sheet for the fourth quarter of 2020, with growth of almost 50% in net revenue in dollars, to US $ 14.8 billion. The Ebitda went from US $ 3.5 billion to US $ 4.2 billion, in the annual comparison. The sum in this line would exceed US $ 9 billion, but it was impacted by the Global Repair Agreement, related to Brumadinho, more donations to combat covid-19 and provisions for adjustments to the dams. What most cheered the shareholders, however, was the announcement of a dividend of US $ 7.3 billion related to the results of the second half of 2020 and the first half of this year.
Vale ended December net cash, that is, with more money in its coffers than debt: US $ 14.2 billion in investments to US $ 13.3 billion in maturities. However, the expanded value of the commitments is much higher, considering the penalties related to Brumadinho and Mariana (Samarco), reaching a net total of US $ 13.3 billion – that is, the total amount owed by the company doubles.