Delivery Hero shareholders criticize focus on growth rather than profit

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by Ulrike Period

FRANKFURT (DOW JONES) – At this year’s Annual General Meeting, the delivery service Delivery Hero was confronted with very important questions and demands from many shareholders to make a profit in the end. The fund company Deca Investments criticizes, among other things, a “business-political sweet course”, which led to a six-month guest appearance by the group in Germany in 2021. This and ongoing losses “squeezed the stock price down,” she criticized Cornelia Zimmerman, expert on sustainability and corporate governance at Decca Investments.

“Because revenue growth alone isn’t enough for us over the long term, eventually we need to make a profit,” Zimmerman said Thursday. When it comes to remuneration, the group should set itself “profit zones as a clear goal,” says Zimmermann. Deca Investments is seeking to vote against the capital deployment measures, share buybacks and approval of the compensation report, among other things.

This was also rejected by Ricardo Vintzer, spokesman for the SDK investor protection association. Both shareholder representatives criticize that the remuneration of the board of directors is linked too strongly to sales growth instead of an increase in profitability. According to Vintzer, with increasing legal requirements for “classic social standards” such as minimum wage, social protection and the provision of essential work equipment, as well as increasing requirements for environmental protection, the question arises “whether the medium to long-term business can be run profitably during the period”.

Christian Rhl, voting rights representative of the German Protection Association for Securities Holdings (DSW), also rejects the planned new authorization to buy back shares. “However, for a company that is not making a profit, stock buybacks are not part of the ‘toolbox,'” says RHL. RHL is also asking management to assess current interest rate and currency risk, particularly in light of the syndicated line of credit announced in early April.

Contact the author: [email protected]; @UlrikeDauer_

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(ENDS) Dow Jones Newswires

June 16, 2022 06:00 ET (10:00 GMT)

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