Emmanuel Faber had been CEO since 2014 and CEO since 2017, and had been facing a sling of shareholders for several weeks, who had notably demanded the separation of the two functions in order to restore new vigor to the group, battered by the Covid pandemic. 19.
“Reinvent” and “reorganize” Danone
A board meeting ruled Monday, and the information was announced by press release, more than three and a half hours after the meeting began. The executive management of the group will therefore escape Mr. Faber, who as chairman of the board of directors will be responsible for strategic orientations. “The process of selecting a general manager starts from now, it will take several months,” a source close to the management told AFP.
Two investment funds had made the departure of Mr. Faber a prerequisite for the recovery of the group’s performance, whose sales volumes have been eroding for several years, a movement aggravated by the health crisis. These funds – which recently entered the capital thanks to the fall in the share – hit the nail on the head at the end of last week.
Artisan Partners, third shareholder with 3% of the capital, repeated that he found “urgent to deal with the structure of the board and the management of the company” and called for a change of management for the “reinvention” of Danone.
Danone is working on a global reorganization plan providing for up to 2,000 job cuts among its managers. Artisan Partners said they wanted the appointment of a new chairman and a new managing director, endowed with “relevant external expertise”.
He was not entirely successful. The administrators rejected – unanimously, took care to specify the direction -, a proposal which consisted in interrupting Local First, the plan of global reorganization launched by Emmanuel Faber.
The activist fund Bluebell Capital Partners, based in London and more modest in scope, also asked that a managing director be sought outside Danone. According to him, the shareholders of the group “overwhelmingly” in favor of the separation of the functions of chairman and managing director. He threatened to put the subject on the agenda of the next general assembly, at the end of April, if the board of directors did not take it up.
Trade unions and investment funds
Boss known to defend a capitalism freed from short-termism, greener and more social, Emmanuel Faber was the first director of Danone not from the Riboud family. Until now he had contented himself with saying that he was “not dogmatic” on the separation of functions.
“I am really very happy that we have taken the governance arrangements already making it possible to anticipate the next phase in the development of this unique company that is Danone”, assured Mr. Faber, quoted in the press release. The group seemed in any case anxious to show that it did not forget to pay its shareholders.
On February 19, during the presentation of the results, Emmanuel Faber announced that the remuneration of Danone’s main executives, including his own, would henceforth be partly subordinated to the evolution of dividends and the share price.
And Sunday, on the eve of the board meeting, the group announced that it would withdraw from the Chinese dairy giant Mengniu and that the fruits of the operation would be returned “in their majority” to shareholders. According to Danone, its stake in Mengniu is currently valued at 850 million euros.
Worried about seeing investment funds dictate the group’s strategy, several group unions (CFDT, FO and CGC) had given their support to the current governance. “Whether it’s something, tartempion or contraption that manages the company, from the moment they apply the same policy that we have today, that suits us well. It is not the man we are defending, it is governance, ”Bruno Largillière, CFDT coordinator at Danone, told AFP, while specifying that he would prefer Mr. Faber to remain in place.
“We would not understand at all that it is called into question to bring more profit to the shareholders who arrive today, weigh only 3% and come to revolutionize the company”, he added.