OMV's Bonus Overhaul Stirs Investor Backlash as Borouge Delay Hits Dividends

OMV shares trade near 52-week high despite rift with Deka Investment over compensation overhaul and dividend cut tied to Borouge IPO delay.

OMV shares traded within a whisker of a 52-week high on Thursday as the Austrian energy group convened its annual general meeting in Vienna, but the buoyant market performance belied a growing rift with one of its largest institutional shareholders over how the company treats its owners and its top executives.

The friction traces back to a setback at Borouge International, OMV's petrochemical joint venture with Abu Dhabi's Adnoc. The partners have kicked the planned initial public offering down the road to 2027 and halved this year's distribution, chopping OMV's dividend contribution from $500 million to $250 million. That works out to a loss of 60 to 70 cents per share for OMV's owners, a hole that fund manager Deka Investment wants filled.

Deka's Cornelia Zimmermann pressed the board to compensate the shortfall through a special dividend or a higher payout ratio. At the same time, the German money manager signalled it would withhold support for the board's proposed compensation overhaul, arguing that it is unacceptable to ease bonus rules for executives while shareholders absorb a hit to income. "Relief for management while investors take cuts does not add up," the message from Deka implied.

The board, however, pressed ahead with a radical redesign of executive pay, winning shareholder approval for a model that takes effect in 2026. Short-term annual bonuses will now be paid entirely in cash, scrapping the previous requirement to invest at least one-third of that bonus in OMV shares and lock them up for three years. The long-term incentive remains equity-based but will be handled through a separate multi-year programme. OMV also removed a "change-of-control" clause that would have accelerated payouts in the event of a takeover. In another change, board members must hold OMV shares equal to one year's base salary; for the chief executive, that halves the previous requirement of 200% of base pay.

The timing dovetails with a change at the top: Emma Delaney takes over as chief executive in September, succeeding Alfred Stern. The company is also proposing a total dividend of €4.40 per share for the 2025 financial year — a regular payout of €3.15 plus a special dividend of €1.25, down from the prior year's €4.75. Despite the governance row, OMV shares have climbed 31% year-to-date and settled at €63.20, within 1% of the 52-week high of €63.85 and a full 22% above the 200-day moving average. The vote on the compensation system will now be closely watched: if a significant minority opposes the plan, pressure on the board could intensify.