Porsche 2004 Annual Report Download - page 33

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members of the Porsche and Piëch families, a circumstance that in
the past fiscal year again provided the necessary basis for the
company’s operative activities. More than half of the preference
shares are held by institutional investors such as investment funds,
banks and insurance companies. These are mainly based in Great
Britain, the USA and Germany, but to a lesser extent also in other
European countries and Asia. Slightly less than half of the Porsche
preference stock is widely distributed among private investors,
primarily in Germany. Holders of Porsche AG’s common stock also
hold preference stock.
Clear Positions on Stock Market Topics
On the capital market as elsewhere, Porsche demonstrates courage
and determination and is prepared to stand up for its own opinions.
In the review year as before, the company spoke out vehemently
against the call for it to submit quarterly reports and has not hesitated
to defend its views on this subject in the courts of law. Porsche has for
example submitted a voidance petition to the Administrative Court of
the Federal German State of Hesse in Kassel with the intention of clar-
ifying the legality of the ruling that the submission of quarterly reports
is a precondition for admission to the German Stock Exchange’s Prime
Standard ranking. Porsche regards this ruling as invalid and therefore
took legal action at the Frankfurt Administrative Court in Frankfurt
prior to its submission in Kassel. The Frankfurt court was evidently
unwilling to resolve this key question, and for this reason Porsche
lost no time in submitting its application to the Hesse Administrative
Court in Kassel, the decision of which was still pending when this
report closed for publication.
Since it was first quoted on the stock exchange in 1984, Porsche has
never published quarterly reports. The German Stock Exchange there-
fore struck it off the M-Dax list and refused it Prime Standard ranking.
Porsche’s refusal to publish quarterly reports, however, is based on
fundamental considerations, since such reports increase the volatility
of the stock market unnecessarily and thus give rise to hectic stock
price fluctuations. In addition, they encourage short-term corporate
thinking, which would be particularly harmful to the sound long-term
development of a relatively small manufacturer such as Porsche.
Porsche does not intend to be forced into such a short-winded posi-
tion, but will maintain its policy of credible substance and continuous
information. The company’s refusal to publish quarterly reports has
had no adverse effects on the price of the stock. On the contrary, there
has been increasing interest on the part of investors in recent years,
especially at international level. This has been aided by the fact that
Porsche has for some time now been included in two highly reputable
international indices: the “Morgan Stanley Capital International” index
and the “Dow Jones STOXX 600”. Furthermore, the company has
been included from March 2005 on in the British “FTSE4Good” Index,
which comprises only share-issuing companies that pursue a corpo-
rate policy oriented toward ecological, ethical and social criteria.
The Stuttgart-based automobile manufacturer also adopted a firm
position with regard to another stock-market topic during the review
year: the fusion of the stock exchanges in Frankfurt and London,
planned for the beginning of 2005. Porsche has expressed its oppo-
sition to the take over plans of the Deutsche Börse AG since it feels
that the fusion would adversely affect the interests of German share-
issuing companies and lead to domination of the market. A number
of experts on the Frankfurt financial scene share this opinion, and like
Porsche were no doubt relieved to learn that pressure from its own
shareholders has now forced Deutsche Börse AG to abandon its
takeover plans.
Porsche also adopted a clear position on the question of forcing
companies listed on the stock exchange by law to publish the salaries
paid to members of their boards of management. This decision was
taken by the Federal German government in June 2005. In Porsche’s
opinion, publishing the sums earned by individual board members does
not provide any extra knowledge that could be relevant to investors’
purchase or selling decisions. On the contrary, when taking an invest-
ment decision the investor needs only to be in a position to decide
whether the total amount paid to the Executive Board is in reasonable
proportion to the company’s success. Porsche is firmly convinced
that it is sufficient as before to state the total sum earned by the
members of the Executive Board and the proportions thereof that
are fixed or success-related.
Development of Porsche Share compared to DAX and CDAX-Automobile in percent
130
120
110
100
90
80
70
1.8.04 1.9.04 1.10.04 1.11.04 1.12.04 1.1.05 1.2.05 1.3.05 1.4.05 1.5.05 1.6.05 1.7.05 31.7.05
Porsche CDAX-Automobile DAX