Ecology or profit: why the boss of Danone is contested
Audio 04:07
Emmanuel Faber, CEO of Danone, in 2017. AFP
By: Dominique Baillard Follow
9 mins
Will Danone's CEO survive the attack launched against him by minority shareholders?
What exactly do we blame him for?
The board of directors of the French agri-food giant is meeting this Monday, March 1 to discuss the governance of the group.
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The American fund Artisan Partners and the British Bluebell Capital have made the same observation: since Emmanuel Faber took over at the helm of Danone seven years ago, shareholders are still hungry: the overall return on the share is systematically lower. to that of the two big competitors, the Swiss Nestlé and the American Unilever.
The pandemic was the coup de grace: with the containment and closure of restaurants, water sales in Evian, one of the group's flagships, collapsed.
Danone and its flagship brands, Danette, Activia and Evian water, have had their fill but remains very profitable with a yield of 14% and a stable profit at one billion 500 million euros.
The CEO of the group retaliates, and suggests that it is the environmental commitment of the company that the funds want to torpedo
Because Emmanuel Faber has transformed Danone into a mission-driven company, a first for a listed company.
Concretely this means that its objective is no longer the only profit, but also the service of the consumer and the planet.
The company now has a social and environmental responsibility.
It was already in its DNA: the company was founded by Antoine Riboud, an apostle of sustainable development.
Emmanuel Faber registered it in the statutes.
And in the acts.
With investments of 2 billion euros announced last year to lower CO2 emissions, to end plastic packaging, or to help farmers produce better.
He recognizes that short-term returns can be affected.
Activist funds question this vision?
On the contrary, they swear that they are very attached to it, within Danone as in the other companies where they are present.
But their impatience to receive the dividends pleads against them.
It is always the obsession with yield, with shareholder compensation that guides activists' attacks.
They are suspected of wanting to dismantle the group to extract more value.
This fear is shared by several unions, which is why they gave their support to Emmanuel Faber.
However, this boss is not always very social in day-to-day management.
He announced in November the cut of 2,000 jobs, out of a total of 100,000 around the world to boost the share price.
Danone's board of directors meets at the end of the day to decide the fate of Emmanuel Faber?
The funds demand his head.
Not sure that the council manages to decide because it is deeply divided.
Some of the administrators keep their confidence in this green boss, others are worried that marketing budgets have melted, they are tired of the permanent reorganization of the group led by this lonely CEO and they are even frankly annoyed by his propensity. to give lessons in ecology to the entire planet.
Emmanuel Faber, who is quicker to defend his vision of the company of the future in international forums than among his peers, does not fare well in the conservative circles of French capitalism.
In short
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