New rules for the calculation of the majority in shareholders’ general meetings: According to the Loi de simplification, de clarification et d’actualisation du droit des sociétés, the majority in ordinary and extraordinary general meetings in French sociétés anonymes must now be calculated based on the number of votes cast by shareholders present or represented and not on the basis of the number of votes they hold. This new method for calculating the majority will have the effect of “neutralising” abstentions, whereas they were before de facto counted as a “no” vote. These new rules will apply to public and private companies alike, as from the general meeting held to approve the first financial statements following the promulgation of the law (i.e. the AGM held in 2020 for companies closing on 31 December).
Revised say on pay rules:
The French Government enacted revised say on pay rules through an order and a decree dated 27 November 2019. Whilst the overall architecture of the French say on pay regime remains unchanged, the reform brings significant changes to the existing rules. The new rules will apply to annual shareholders’ meetings held after January 1. Read more...
Reform of takeover regulations: Further to the lowering of the squeeze-out threshold, the French market authority has launched a public consultation on a series of proposed changes in takeover regulations. Essentially the proposals aim to strengthen the protection of minority shareholders as well as better guaranteeing the independence of experts and the transparency of their mission. The changes may in certain cases result in a longer takeover process. The reform is expected to be enacted late in 2019 or early 2020.
Pay ratio disclosure: CEO pay ratios disclosure rules adopted in 2019 will apply in 2020 for the first time for most of the companies listed on a regulated market (those whose financial year ends on 31 December). Corporate governance reports must now contain a comparison between the compensation of corporate officers (chairman of the board of directors, CEO and deputy CEO) and the average and median compensation within the company.
Foreign investment control: further extensions: 2020 may see further extensions to the scope of foreign investment control. The Minister for the economy, Bruno Le Maire, announced plans to make the rules applicable to food products and the media, and rules could apply when crossing a 25% threshold in shares or voting rights (compared to 33.33% today), capturing more transactions.