LONDON, June 14 (Reuters) - Investor advisory firm PIRC has advised shareholders in Volkswagen to reject its dividend plans and oppose a vote of confidence in the carmaker’s management board, which it believes has failed to reform a slew of corporate governance weaknesses. PIRC, which advises investors institutional investors collectively holding assets in excess of 1.5 trillion pounds ($2.12 trillion), flagged concerns that VW has not addressed “key weaknesses” within its governance structure, including the “overlap of major shareholders and controlling functions, a remuneration structure excessively linked to sales, the absence of a whistle blowing system and an apparently inefficient internal audit system”. It told investors to oppose a “discharge” vote for the company’s management board, which under German corporate governance code is considered a vote of confidence in its management and policies. Earlier on Tuesday, two sources familiar with the matter told Reuters that members of the Porsche SE holding company, which controls VW will hold a board meeting on Monday to decide whether to block its plans to pay a dividend. In September 2015, Volkswagen admitted violating emissions tests in the US and could be fined up to USD 18 billion by the US Environmental Protection Agency (EPA). While its former CEO Martin Winterkorn lost his job in the wake of the scandal, PIRC said its impact upon corporate governance remains minimal. ($1 = 0.7075 pounds) (Reporting By Sinead Cruise; Editing by Rachel Armstrong)
Volkswagen (VW) shareholders have been advised to oppose both the company’s dividend proposals and a vote of confidence in its management by an investor advisory firm. The firm, Institutional Shareholder Services, is advising VW on how it can avoid having to pay out dividends for at least two years after being forced into administration last month.