EQS Group-News: RBR Capital Advisors / Key word(s): Miscellaneous RBR Capital Advisors: OPEN LETTER TO THE SHAREHOLDERS OF GATEGROUP 04.04.2016 / 17:31 The issuer is solely responsible for the content of this announcement.
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OPEN LETTER TO THE SHAREHOLDERS OF GATEGROUP April 4, 2016 Dear shareholders of gategroup, In its latest press release gategroup continues to mislead investors with false information. The calculations and assumptions in our letter to shareholders from March 30 regarding the executive compensation of gategroup management are correct. In particular, we reiterate that the calculation of CHF 7.5 million in annualized compensation for the CEO for 2015 is a fair representation and stands in stark contrast to the CHF 4.4 million reported by gategroup in its annual report. We simply adjust for the fact that the company has used a much lower share price than the market price at year-end and for the fact that the CEO only worked for nine months. For further information regarding the compensation excesses at gategroup please consult the letter to shareholders from March 30 which can be found on www.savegategroup.com. We are not surprised that gategroup continues to make false and misleading statements under the leadership of Chairman Andreas Schmid and continues with its calamitous record of poor corporate governance. This is just another piece of an ever larger puzzle of damaging and selfserving behavior. We encourage you to visit the website www.savegategroup.com and review the corporate governance presentation from March 2016 which lists the most recent corporate governance mishaps. We are convinced that gategroup cannot progress under a leadership that lacks ethical and moral standards and that the chairman should under no circumstance continue to lead this company. It is essential that you, as shareholders, properly assess all public information and cast an informed vote at the upcoming AGM. A victory for good corporate governance for gategroup's shareholders will set the precedent that public shareholders should not tolerate the kind of shenanigans gategroup shareholders have endured over the last seven years. Some might argue that it is acceptable for the chairman to stay on the company's board for another year since he has announced he will step down next year. We strongly oppose this view for two reasons: First, re-electing the chairman for another year would indicate a sanctioning of past mismanagement, which would have far-reaching consequences beyond the case of gategroup. It signals that shareholders are passive and can easily be appeased. It is time to change the company for the better to prevent the further destruction of value for shareholders. Second, as long as the current chairman is in office he will be able to exert influence on who his successor will be. Given his track record, we believe that is a very dangerous proposition. We have spoken to potential candidates, all of whom have an excellent track record as CEOs and chairmen of listed Swiss companies. They all represent the best in great operational performance and good corporate governance. We cannot miss the opportunity to instigate change for the better. By re-electing the current chairman, you risk that a successor of the same breed will be chosen. To show how gategroup compares with best-in-class Swiss companies regarding compensation we have put together Figure 1, which you can find in the appendix. All these companies have a strong track record for long-term value creation and reward their management teams accordingly. It is false to claim that the compensation of top management at gategroup is market based or performance oriented. As a matter of fact, gategroup's operating performance significantly deteriorated in 2015. Sales increased 3.3% in local currency while the number of employees increased by 4%. Other operating expenses, excluding restructuring charges, increased by 7% in Swiss francs and significantly more in local currency. Consulting and legal fees increased by a shocking 35% in Swiss francs. To claim, as the company does, that the operating performance is improving is simply wrong. Furthermore, compensation for gategroup management was significantly lower in 2010, a year when profits for shareholders were significantly higher than in 2015 (even adjusted for all exceptional items). We fail to understand the logic behind this. The culmination of disinformation in the latest press release from gategroup was reached when the company claimed that there is no connection between EBITDA and EPS. For the benefit of all shareholders, we have added Figures 2a and 2b which show how EPS targets translate into EBITDA margins. Our earlier statement that the shares from the ELTIP 2015 program will vest even if the margin falls below the guided target range remains unchanged. In summary, it is not enough to vote 'No' on the 2015 compensation report and maximum executive management compensation for 2017. The chairman should bear the consequences for the disastrous past eight years and this entirely inappropriate compensation proposal. Re-electing him would sanction his damaging behavior. The time has come to install best-in-class corporate governance and a focus on great operational performance. Sincerely, RBR Capital Advisors AG Cologny Advisors LLP Rudolf Bohli Jonathan Herbert +++++ Additional features: Document: http://n.eqs.com/c/fncls.ssp?u=YDUVBGDPGX Document title: OPEN LETTER TO THE SHAREHOLDERS OF GATEGROUP
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04.04.2016 This Corporate News was distributed by EQS Schweiz AG. www.eqs.com - news archive: http://switzerland.eqs.com/de/News The issuer is responsible for the contents of the release.
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450939 04.04.2016
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OPEN LETTER TO THE SHAREHOLDERS OF GATEGROUP April 4, 2016 Dear shareholders of gategroup, In its latest press release gategroup continues to mislead investors with false information. The calculations and assumptions in our letter to shareholders from March 30 regarding the executive compensation of gategroup management are correct. In particular, we reiterate that the calculation of CHF 7.5 million in annualized compensation for the CEO for 2015 is a fair representation and stands in stark contrast to the CHF 4.4 million reported by gategroup in its annual report. We simply adjust for the fact that the company has used a much lower share price than the market price at year-end and for the fact that the CEO only worked for nine months. For further information regarding the compensation excesses at gategroup please consult the letter to shareholders from March 30 which can be found on www.savegategroup.com. We are not surprised that gategroup continues to make false and misleading statements under the leadership of Chairman Andreas Schmid and continues with its calamitous record of poor corporate governance. This is just another piece of an ever larger puzzle of damaging and selfserving behavior. We encourage you to visit the website www.savegategroup.com and review the corporate governance presentation from March 2016 which lists the most recent corporate governance mishaps. We are convinced that gategroup cannot progress under a leadership that lacks ethical and moral standards and that the chairman should under no circumstance continue to lead this company. It is essential that you, as shareholders, properly assess all public information and cast an informed vote at the upcoming AGM. A victory for good corporate governance for gategroup's shareholders will set the precedent that public shareholders should not tolerate the kind of shenanigans gategroup shareholders have endured over the last seven years. Some might argue that it is acceptable for the chairman to stay on the company's board for another year since he has announced he will step down next year. We strongly oppose this view for two reasons: First, re-electing the chairman for another year would indicate a sanctioning of past mismanagement, which would have far-reaching consequences beyond the case of gategroup. It signals that shareholders are passive and can easily be appeased. It is time to change the company for the better to prevent the further destruction of value for shareholders. Second, as long as the current chairman is in office he will be able to exert influence on who his successor will be. Given his track record, we believe that is a very dangerous proposition. We have spoken to potential candidates, all of whom have an excellent track record as CEOs and chairmen of listed Swiss companies. They all represent the best in great operational performance and good corporate governance. We cannot miss the opportunity to instigate change for the better. By re-electing the current chairman, you risk that a successor of the same breed will be chosen. To show how gategroup compares with best-in-class Swiss companies regarding compensation we have put together Figure 1, which you can find in the appendix. All these companies have a strong track record for long-term value creation and reward their management teams accordingly. It is false to claim that the compensation of top management at gategroup is market based or performance oriented. As a matter of fact, gategroup's operating performance significantly deteriorated in 2015. Sales increased 3.3% in local currency while the number of employees increased by 4%. Other operating expenses, excluding restructuring charges, increased by 7% in Swiss francs and significantly more in local currency. Consulting and legal fees increased by a shocking 35% in Swiss francs. To claim, as the company does, that the operating performance is improving is simply wrong. Furthermore, compensation for gategroup management was significantly lower in 2010, a year when profits for shareholders were significantly higher than in 2015 (even adjusted for all exceptional items). We fail to understand the logic behind this. The culmination of disinformation in the latest press release from gategroup was reached when the company claimed that there is no connection between EBITDA and EPS. For the benefit of all shareholders, we have added Figures 2a and 2b which show how EPS targets translate into EBITDA margins. Our earlier statement that the shares from the ELTIP 2015 program will vest even if the margin falls below the guided target range remains unchanged. In summary, it is not enough to vote 'No' on the 2015 compensation report and maximum executive management compensation for 2017. The chairman should bear the consequences for the disastrous past eight years and this entirely inappropriate compensation proposal. Re-electing him would sanction his damaging behavior. The time has come to install best-in-class corporate governance and a focus on great operational performance. Sincerely, RBR Capital Advisors AG Cologny Advisors LLP Rudolf Bohli Jonathan Herbert +++++ Additional features: Document: http://n.eqs.com/c/fncls.ssp?u=YDUVBGDPGX Document title: OPEN LETTER TO THE SHAREHOLDERS OF GATEGROUP
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04.04.2016 This Corporate News was distributed by EQS Schweiz AG. www.eqs.com - news archive: http://switzerland.eqs.com/de/News The issuer is responsible for the contents of the release.
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450939 04.04.2016
