02 Nov

Report EGM (Extraordinary General Meeting)

The SPAAK board visited the combined ordinary and extraordinary general meeting (EGM) of Air France-KLM (AFKL) held at the Hotel Pullman Paris Centre Bercy on Monday 4 September. The reason for this EGM was the announcement of new strategic cooperation activities within AFKL. AFKL will take a stake of 31% in Virgin Atlantic and the alliances with Delta and China Eastern Airlines will be strengthened. The EGM was convened to execute (part of) the related strategic transactions. This includes the printing of AFKL shares for the investments by China Eastern and Delta. In turn, AFKL uses this capital to invest in Virgin and to repay debt.

During this shareholders meeting, where more than 54.85% (the quorum) of the shareholders were present or represented, all proposed resolutions were adopted. In addition, at the request of a shareholder, the meeting adopted a new resolution regarding the appointment of a nineteenth AFKL board member.

The following resolutions were adopted:

  • Appointment of two new AFKL board members. They will represent China Eastern Airlines and Delta Air Lines from the completion of the reserved share capital increases, for a period of four years. Mr. Bing Tang will represent China Eastern and Mr. George Mattson will serve on the Board of Directors on behalf of Delta Air Lines;

  • Appointment of a nineteenth 'female' director for a period of four years by the company Air France-KLM Finance SAS. Once again, upon completion of the reserved share capital, increases for the benefit of China Eastern and Delta;

  • The Board of Directors is authorised to carry out the reserved share capital increases for China Eastern Airlines and Delta Air Lines each for a total nominal amount of 37,527,410 euros at a price of 10 euros per share;

  • Finally, a vote was taken on capital increases reserved for employees of a company or group savings scheme. These are permitted for a period of 12 months and within a limit of 2% of the share capital. This authorization replaces the resolution of the same nature voted by the shareholders' meeting of May 16, 2017.

In particular, the spontaneous motion submitted by a shareholder at the meeting on the female nineteenth board member caused a stir in the Netherlands, including many speculations and misunderstandings. That is why an explanation is given below:

At the time of the dispatch of the documents belonging to the EGM, the name of the Delta board member had not yet been filled in. When it became known during the EGM that the Delta board member was also a man, the relationship between man and woman on the board no longer complied with French law. The French law states that the ratio of sex in the board must be at least 40/60.

To make it even more complex; the law also says that this is not board members appointed by the trade unions. This person is therefore not included in the ratio in the calculation below.

  • In the old situation with a total of 15 board members (14 + 1 employee-representant) there were 6 female members. This made the ratio woman/man 6/14=42.8%.

  • In the situation that the (male) board member of China Eastern was already known and that of Delta not yet, the ratio v/m was 6/15=40%.

  • If Delta had nominated a female board member, the ratio would have been 7/16=43.8%.

  • But it became a male and so the ratio v/m in new situation with 17 board members is 6/16=37.5%.

  • Adding an extra woman would bring the ratio v/m back above 40%, 7/17=41,2%.

In France, there is another law that says that for a certain number of board members, the employees may also appoint a board member. In the case of 14 board members, this was one. In the case of 16 board members, that makes two.

The nomination of this second board member comes from the AFKL EWC (European Works Council).