Empirical Evidence and Value Effects
I.1. Preface Monitoring by minority shareholders is a topic that is receiving more attention in Germany – even though shareholder activism is not a completely new phenome- non. A description of an early case of shareholder activism in Germany can be found in the journals Zeitschrift für Wirtschafts- und Bankrecht (1961) and Be- triebs-Berater (1962). Even though the documentation neither states the name of the activist nor the corporation it does reveal some interesting facts on this early incident: in 1957, a minority shareholder of a German corporation at the annual meeting of that corporation asked for additional information regarding executive compensation and he also called for a higher dividend, deeming the manage- ment’s dividend proposal too low. The management denied both the disclosure of the requested information and paying a higher dividend. The activist also urged the corporation to buy back his shares at a premium. The German national supreme court Bundesgerichtshof later ruled that the shareholder’s claims both in terms of information rights and the higher dividend were legitimate (case II ZR 4/60 ruled on 23 November 1961). The corporation who acted as defendant in the case criticized the shareholder as overly aggressive and being driven by speculation purposes. An early and well-known proponent of minority shareholders’ rights was Erich Nold, originally a coal trader from Darmstadt, Germany. He became re- ceived attention as a BMW shareholder fending off a takeover bid by rival car maker Daimler-Benz in 1959 which he and other minority shareholders deemed too low....
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