GSW Immobilien AG (GIB) Chief Executive Officer Bernd Kottmann should quit because his appointment wasn’t transparent, said PGGM NV, the Dutch pension fund that owns a stake in the German residential landlord.
“PGGM deems it extremely important that the companies it invests in should have and maintain a robust corporate governance structure,” the pension fund said in a statement today, adding that it also wants Chairman Eckart John von Freyend to resign. “PGGM finds the procedure adopted for the recent appointment of a new CEO at GSW to be unacceptable.”
GSW, Germany’s fourth-largest residential landlord by market value, said on March 18 that Kottmann would succeed Thomas Zinnoecker as CEO on April 16. The appointment was made about a week after GSW announced Zinnoecker’s departure. The Berlin-based company plans to fight PGGM’s proposals, Freyend said by telephone.
“Their demands are incomprehensible,” he said. “We assume that PGGM is misinformed because they’re criticizing the selection process, but the process was extensive.”
The hiring process began on Feb. 13, before Zinnoecker’s departure was announced, and lasted for five weeks, Freyend said. GSW considered at least 10 candidates before choosing Kottmann, he said.
GSW yesterday published an invitation to its annual shareholders meeting on June 18 in which it said that PGGM had called for a vote of confidence in Kottmann and proposed removing Freyend. PGGM has a stake of 2.98 percent in GSW, according to an October 2012 statement.
The Dutch company said it had doubts about the supervisory board’s independence in making its selection. Both Kottmann and Freyend worked at IVG Immobilien AG (IVG), another German real estate company, which “got into great difficulties in 2008 under their management,” PGGM said.
Kottmann worked at IVG from 1997 to 2009, holding positions including chief operating officer and chief financial officer, according to GSW’s website. Freyend was IVG’s CEO from 1995 to 2006, according to data compiled by Bloomberg. IVG’s stock has dropped more than 90 percent in the past five years as the Bonn-based company struggles to pay debt used to make acquisitions.
“In the end, Kottmann was chosen because he was an exceptional candidate. The decision was taken by the six members of the supervisory board, not by me,” Freyend said.
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