Concentration Indicator: What does the performance indicator "Ownership concentration" mean? 

The Concentration Indicator helps you understand a company’s direct ownership structure using a 1-to-7 scale, ranging from dispersed ownership to sole ownership. It is designed to indicate how much influence shareholders may be able to exercise over company decisions.

The Concentration Indicator classifies direct shareholdings based on the size of the largest and second-largest shareholders relative to governance-relevant ownership thresholds. The largest shareholder determines the highest ownership threshold reached, indicating the maximum level of influence over company decisions. The second-largest shareholder is used to measure both ownership concentration among other shareholders and potential counterweights to the largest shareholder. 

This is an overview of the three thresholds, for more detail follow the links to the glossary articles for a more in-depth explanation: 

• Blocking minority, Sperrminorität (25% < x <= 50%): Fundamental company decisions cannot be made without the approval of all blocking minority shareholders. They must hold more than one quarter of the shares.  
• Simple majority, einfache Mehrheit (50% < x < 75%): Shareholders with over half of shares can pass ordinary decisions by outvoting all other shareholders, but still need the approval of blocking minorities for fundamental company decisions. 
• Qualified majority, qualifizierte Mehrheit (x >= 75%): Shareholders with three fourths or more shares can independently pass fundamental as well as ordinary company decisions.

Based on these thresholds the Concentration Indicator classifies companies in the following manner:

Interpretation

Each level of ownership concentration features it's own governance implications. The following interpretations consider how many shareholders are necessary to take or block ordinary or fundamental decisions. 

1. Dispersed: Multiple shareholders must coordinate to block fundamental decisions or reach any kind of majority.
2. Single Veto Holder: One shareholder can independently exercise veto power, but needs to coordinate with more shareholders in order to pass ordinary decisions.
3. Multiple Veto Holders: At least two shareholders can individually exercise veto power, this means that they must agree to fundamental company decisions. They must also coordinate to pass ordinary decisions, as they will always total more than 50%, this describes common shareholding structures such as 33%/ 33%/ 33% and 50%/ 50%.
4. Majority-Controlled: One shareholder can pass ordinary decisions unopposed. However they must coordinate with other shareholders in order to pass fundamental company decisions. There isn't a specific shareholder with which the majority shareholder needs to coordinate.
5. Majority + Veto: One shareholder can independently pass ordinary decisions, however they must coordinate with a blocking minority shareholder in order to pass fundamental decisions. No other combination of shareholders can reach the 75% supermajority threshold.
6. Supermajority-Controlled: A single shareholder controls both fundamental and ordinary decisions. No grouping of other shareholders can exceed the 25% necessary to veto fundamental decisions. 
7. Fully Owned: The company is entirely controlled by a single 100% shareholder.
   
   

The governance implications of each concentration level are summarized in the table below. It shows the minimum number of shareholders whose combined holdings could be sufficient to reach each governance threshold.

The calculation assumes that each shareholder holds the maximum possible percentage within their shareholder category. For example, a non-blocking minority shareholder is assumed to hold 25% of the shares, a blocking minority shareholder 50%, and a majority shareholder 74.9%.

A plus sign indicates that the figure is a lower bound. Depending on the actual distribution of shares, additional shareholders may be required to reach the relevant threshold. For example, “2+” means that at least two shareholders are needed, but two may not always be sufficient.