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No first class train tickets for poor shareholders

Tuesday 8 March 2016

An unexpected encounter while traveling by train, made me as a shareholder wonder what is going on. A true story. A rare look behind the scenes of a company in the DAX 30 index.


I recently took the train from Cologne to Bremen. I have all my life always travelled second-class. Only after reaching the age of 59 years did I allow  myself the luxury to travel first class. As an private investor I always pay out of my own pocket for all trips.

 

This time around I did not travel in the large open car but in one of those old style compartments. I was lucky. A nice lady, in her mid-thirties, was already sitting in the compartment. We started talking. She was returning from a training seminar in Rheinland-Pfalz. It turned out that she was working in a laboratory. As she sat in first class, I assumed that she worked for a government agency or a scientific organization of the European Union. Normally I'm not so curious, but I was interested to find out if my assumption was correct.

 

But far from it: the employer was a world-renowned DAX conglomerate in southern Germany. The company has not been doing very well for a long time .

The share price has for several years been lagging behind the index . Shareholders had little reason to rejoice. As I was somewhat surprised, the lady told me: the management agreement  of the company entitled female employees on longer train journeys to travel first class.

 

I was somewhat blown away by that. A discussion about the "pros and cons" did not seem appropriate considering the cheerful demeanour of my fellow travelers. I did not say anything. Only two thoughts went through my head. I hope she could not read my mind:

  1. Did I miss anything in Germany and on the train? As a precaution I went directly to some wagons in second class to see how bad it was there for the passengers. I did not find anything remarkable or out of  the ordinary.
  1. My concern was for my stock portfolio and my shareholdings. Did I have this DAX stock somewhere in my portfolio? I was pretty sure that I did not own the stock in the portfolio. Only later when I checked my records, could I breathe a sigh of relief.

I basically wish all people only the best. But: Now I, of course, wonder are we dealing here with an amazing individual case? Or has Germany begun  on a path towards social comfort which I completely missed?

 

I can twist and turn it around all I want. But this has nothing  to do with a meaningful motivation of employees. Such a policy and condition in a corporation appears to me as unacceptable and a waste of money. I would never have agreed to such a condition. I can not change anything. But this share, will not be placed in my order book. Anyway ...... the poor shareholder ultimately has to pay for such escapades. Late that night I thoughtfully got of the train in Bremen.