Investors Balk at BMW Plan to Promote Reithofer

BMW AG's board faces resistance in its plan to promote CEO Norbert Reithofer to chairman of its supervisory board, the Frankfurter Allgemeine Zeitung reports.

Reithofer will turn 60 BMW's normal retirement age for senior managers next year. He is in line to succeed Joachim Milberg, 71. The company said previously he will be succeeded as CEO by production chief Harald Krueger, 49.

But investment advisory firm ISS is opposing the scheme, which will be voted upon by shareholders on Wednesday. The firm argues the appointment would violate general corporate governance.

ISS points out that a critical role for a supervisory board chairman is to critically judge a company's management activities. The firm contends Reithofer can't do that without a cooling off period after relinquishing his CEO post.

Germany's Union Investment, an asset management company, will vote against the nomination. according to the Frankfurter Allgemeine report. But the newspaper says the Quandt family, which controls about 47% of shareholder votes, can assure Reithofer's appointment.