Berkeley Group Holdings plc September 6 2017

Home » Berkeley Group Holdings plc September 6 2017

Disclaimer: These are excerpts from student assignments conducted as part of a Corporate Finance class. The opinions represented do not necessarily agree with mine. I do not vouch for the quality of the recommendations or the accuracy of the numbers. Follow the recommendations on your own risk.

Students divided on equity issuance authorization: Berkeley’s current low valuation means timing not good to issue new shares, but authorization can enable more flexibility

Recent debt issuance has brought Berkeley to peers’ debt levels but looks much healthier, with huge interest coverage ratios

Political connections can lead to better treatment, but can also make corruption tempting and decrease internal incentives, say students and recommend against the EU donations proposal

Proposal Excerpt of Student Recommendations
For Against
(2)Say-on-Pay
  • FY17 was a record result.
    The remuneration report was approved at the EGM
(3)Director elections
  • Directors have an excellent track record, skills, experience and knowledge needed
(4)Authorization of new shares, pre-emption rights
  • Maintains flexibility to allot, grant, and convert shares
(5)Share repurchases
  • Stock price currently undervalued.
    Current capital structure situation on comfortable level
(6)EU political donations and expenditure
  • Berkeley’s policy prohibits donations, firm has no intention to donate
    Political relationships may lead to lower efficiency and profitability, even make corruption tempting
(7)Shortening notice period from 21 to 14 days
  • 14 days are too short for foreign investors
    21 days would be better for corporate governance

Link to proxy statement:

https://www.berkeleygroup.co.uk/media/pdf/j/8/Berkeley_Annual_Report_2017.pdf

 

Video:

https://v.qq.com/x/page/l0537yqsen9.html