Prague, May 22 (CTK) – Czech energy group CEZ proposes paying out of Kc21m worth bonuses to its management for a general meeting which will take place on June 22, according to the invitation to the general meeting, no bonuses for the management were paid in the previous three years.
In 2015 and 2016, the shareholders approved the Finance Ministry’s proposals that no bonuses be paid. Last year, CEZ management did not propose the bonuses at all for the first time in 16 years.
CEZ raised net profit by 30 percent to Kc19bn last year, partly thanks to a one-off income from the sale of Hungary’s MOL shares and higher production of nuclear power plants. Sales fell by 1 percent to Kc201.9bn.
Net profit adjusted for extraordinary effects, from which dividend is calculated, grew by 5 percent to Kc20.7bn.
“The board of directors and supervisory board made a number of very complicated decisions and this is why it proposes payment of bonuses in the size which corresponds with the practice from the years before 2013 when bonuses were paid each year since CEZ’s setup. However, the decision is in the hands of the shareholders at the general meeting,” CEZ spokesman Ladislav Kriz told CTK today.
When bonuses are not paid, it does not mean that the management loses all benefits. Members of the board of directors can use, among other things, a motivation programme for the purchase of the company’s shares.
At the end of April, the board of directors proposed payment of Kc33 per share before tax in dividend for last year, the same as a year earlier. If the plan is okayed at the general meeting, Kc17.8bn will be paid to shareholders.
Payment of dividend worth Kc33 per share before tax for 2016 was approved by the company’s shareholders last year. The state as the majority owner thus gained almost Kc13bn.
In the previous four years, CEZ paid a dividend worth Kc40 per share each time. Most analysts expected a dividend around Kc35 per share for last year.
CEZ management also proposes that the size of financial gifts in 2019 be worth Kc110m, Kc20m lower than in the previous year. CEZ has said this year that it would stop sponsoring the Karlovy Vary International Film Festival (MFF) after 16 years.
CEZ is the biggest domestic energy producer and the state is its majority owner. It holds some 70 percent of CEZ shares via the Finance Ministry.
CEZ’s potential transformation or split has lately been talked about. The plan is to help, among other things, for deciding on possible construction of a new unit in Dukovany nuclear power plant.
The potential transformation is also among the topics for the general meeting. However, Kriz said this would be only information why this is being considered and discussed, no voting will take place on this.
“It is a big and important topic for the shareholders. We want to present to them the board of directors’ opinion on this issue,” Kriz said.