BOCHUM (dpa-AFX) - Shareholder representatives voiced sharp criticism at Vonovia's annual general meeting regarding the scale of severance payments awarded to former CEO Rolf Buch. The executive stepped down before the scheduled expiry of his contract at the end of 2025. His severance package amounted to nearly 5.8 million euros, supplemented by further payments totaling millions more.

'While we generally approve if contracts have been honored,' Daniel Vos of the Schutzgemeinschaft der Kapitalanleger (SdK) told several hundred shareholders in Bochum, he questioned: 'How could contractual terms be drafted in such a way that they allow for the severance payments currently under discussion?' He noted that this raises a fundamental governance question: 'Is it truly appropriate for the role of a single individual to reach such economic proportions for a company?'

Shareholder representatives: Severance provisions 'inadequate'

Hendrik Schmidt of the fund management firm DWS described the provisions for the termination of executive board mandates as 'inadequate and not in the interest of shareholders.'

In her response, Chairwoman of the Supervisory Board Clara C. Streit referred to the contract with Buch, which had been concluded on the basis of the existing remuneration system. She stated that the Supervisory Board had regularly reviewed the appropriateness of the compensation, which was further confirmed by an independent remuneration consultant. 'In our view, the arrangements agreed upon with Mr. Buch for early termination are in line with market practice.'

Supervisory Board Chair: Contracts concluded according to valid guidelines

The Supervisory Board has always concluded, and will continue to conclude, executive board contracts in accordance with the requirements set by the executive remuneration system and the German Corporate Governance Code in effect at the time, Streit added. Streit also chairs the Government Commission on the German Corporate Governance Code, which provides recommendations for good corporate management.

In addition to the severance payment, Buch is receiving compensation for a post-contractual non-compete clause, preventing him from working for Vonovia's competitors for one year. He is initially set to receive 3.3 million euros for this during the current year, with the exact final amount to be determined later. Furthermore, Buch was granted nearly 211,000 virtual Vonovia shares, the value of which is scheduled to be paid out in early 2028.

New CEO: Society needs a 'strong Vonovia'

The new CEO, Luka Mucic, emphasized the importance of Germany's largest residential real estate company in his speech: 'Society needs a strong and reliable Vonovia,' he said. 'We see ourselves as part of the solution to meeting the challenges of the housing market: through affordable rents, new construction, and investments in climate protection.'

At the end of March, Vonovia managed nearly 471,000 of its own apartments in Germany. There were approximately 40,000 in Sweden and around 20,000 in Austria, totaling nearly 531,000 units. The average monthly rent in Germany stood at 8.26 euros per square meter at the end of March, up 3.8 percent compared to the previous year./tob/DP/stk