HANOVER, Germany — Continental A.G.'s supervisory board has disclosed a series of measures to increase liquidity and drive sustainability amid ongoing economic uncertainty caused by the COVID-19 pandemic.
The company is proposing cutting its dividend 37% to about $3.40 per share, with a total distribution of about $681 million. Continental shareholders will vote on the proposal during a July 14 virtual annual shareholders meeting.
"The economic landscape continues to be characterized by a high degree of uncertainty due to the impact of the coronavirus," Wolfgang Reitzle, chairman of Continental's supervisory board, said in a statement.
The new dividend proposal "strikes a balance between the short-term and long-term interests of Continental," Mr. Reitzle said.
Continental's supervisory board has also decided to present a new remuneration system for executive board members to make it more aligned with the group's long-term sustainable development.
The new system partially will link board members' remuneration to share price performance compared to relevant listed companies in the automotive sector. It also will be based on the achievement of sustainability goals set out by the German group.
Relevant sustainability aspects include:
- Transitioning to renewable sources for all externally procured electricity this year;
- Increasing the representation of women in management positions;
- Reducing the rate of accidents and sickness; and
- Raising the share of recycled waste.
These moves, the company noted, will drive a "fundamental transformation process that is currently under way in the entire automotive industry."