India-based Tractors and Farm Equipment Limited (TAFE), which owns a 16-percent stake in AGCO, reported in November it wants AGCO to separate the role of chairman of the board and CEO “to better fulfill the board’s duty of oversight of the company.”
The move comes in advance of a CEO transition at AGCO. In August, the company announced that its CEO for the past 16 years, Martin Richenhagen, will retire on Dec. 31. Richenhagen has also served as AGCO’s chairman since 2006.
In a Nov. 12 filing with the Securities and Exchange Commission, TAFE says it believes that appointing a separate chair provides the opportunity to improve governance practices and enhances the oversight of management. TAFE also notes that such separation is being increasingly adopted by public companies.
AGCO’s headquarters are in Duluth, Ga. It employs 21,000 people and reported $9 billion in sales last year.
Among other recommendations from TAFE to AGCO:
- Better align compensation programs for senior management with long-term company performance.
- Rotate board committee chairs and other members of the board committees to bring fresh perspectives.
- Refresh the board on a more regular basis to bring diverse views and experience.
Source: Atlanta Business Chronicle