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French activist CIAM asks Scor CEO to give up board chair

Board meeting

(Reuters) — French activist fund CIAM will ask reinsurance company Scor SE’s CEO Denis Kessler, who has run the company since 2002, to surrender the chairmanship of the company’s board after he thwarted a takeover attempt earlier this year.

CIAM, which holds a little less than 1% in Scor, will ask the reinsurer’s shareholders to oust Mr. Kessler from the board at the next general meeting on April 26. The fund does, however, want Mr. Kessler to remain as CEO, it said in a statement on Monday.

Earlier this year, Mr. Kessler successfully opposed an €8.5 billion ($9.62 billion) takeover attempt by Scor’s largest shareholder, Covea Mutual Insurance Group Co., which had offered a 20% premium over Scor’s share price.

Unlisted French insurance company Covea holds just over 8% of Scor and had wanted full control.

Scor’s shares have lost more than 10% since late January, when Covea dropped its plan amid an acrimonious fight in which Scor sued Covea’s top management as well as Covea’s investment bankers for breach of trust.

The fund questions the way Mr. Kessler handled Covea’s move. “The hostile reaction towards its major shareholder did not seem appropriate,” CIAM said.

Furthermore, the fund criticized Mr. Kessler for being “ubiquitous and omnipresent” in the company’s governance and for making it hard for the board to oversee him by constantly reshuffling board seats.

CIAM also criticized Mr. Kessler’s lack of a succession plan, despite being 67, and “his constant referencing of Scor as his, even though is not the founder nor the owner.”

“The dysfunctional governance of Scor is obvious and triggers serious issues in the company’s management that increase risks for shareholders,” the fund said in a document sent to Scor shareholders.

CIAM will also ask shareholders to oppose Mr. Kessler’s pay package and will oppose the renewal of board member Augustin de Romanet, whom they consider too close to Mr. Kessler and who holds too many mandates in other companies. Mr. De Romanet is chairman and CEO of airport operator Aeroports de Paris.

The fund said Mr. Kessler’s compensation is high compared with industry standards and even more so when taking into account Scor’s share price performance.

After being appointed at the helm of Scor in November 2002, Mr. Kessler managed to turned around the then-beleaguered company, but over the past couple of years its shares have underperformed competitors.

More than 20% of Scor’s shareholders have opposed Mr. Kessler’s pay at each annual shareholders meeting since 2016, CIAM stressed.

CIAM recommended appointing British board member Kory Sorenson or her Swiss colleague Bruno Pfister as chair of the board.

A spokeswoman for Scor did not respond to an email seeking comment.



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