Emmanuel Faber, deposed boss of Danone, attacked by activist funds
Audio 03:54
Former Danone CEO Emmanuel Faber during the presentation of the company's financial results on February 19, 2019 in Paris JACQUES DEMARTHON / AFP
By: Ariane Gaffuri Follow
9 mins
Emmanuel Faber, 57, is the former boss of Danone, the French flagship of the food industry with 100,000 employees worldwide.
He had been in the sights of shareholders for months.
During a board of directors on Sunday March 14, they recorded his immediate ouster from the presidency of this group that he led for seven years.
Under their pressure, Emmanuel Faber had already had to give up, at the beginning of March, his duties as general manager.
Publicity
Joined Danone 24 years ago, this atypical CAC 40 boss, a graduate of HEC, three years ago transformed the multinational into a company with a mission, the first in France, with the objective of health through food. , respect for people and the environment, associated with profitability ...
Emmanuel Faber spoke about his vision last May on
France Inter.
“
I think the concentration of wealth is a time bomb.
It is obvious that the market economy as we practice it cannot be sustainable in this crisis if it is not a social market economy.
He assured.
Danone, 72 brands, including Danette, Jockey, Taillefine, Lu, and especially the mineral waters Evian, Volvic and Badois, have taken on water because of the closure of restaurants and the cessation of tourism due to the pandemic .
The company is in equilibrium, but its stock market price rose only 11% while that of its competitor Unilever jumped to 50%.
Shareholders are unhappy, and this dates from long before the health crisis.
Two foreign activist funds denounce mismanagement on the part of a "too powerful" leader: the British BlueBell Capital and especially the American Artisan Partners who demand his departure.
Eric Delannoy, economist and founder of the Tenzing firm explains: “
I believe that if they took this decision, it was not to question Emmanuel Faber's project as a social enterprise, but rather because they had the will to change strategy.
It is claimed that Emmanuel Faber has a rather particular way of governing, there is talk of an "autocratic" man, of "loneliness of power" ... It is said that strategic choices have been made which do not necessarily go in the direction of the sense of profitability compared to its own competitors.
The shareholders threw a stone in the pond on these subjects.
"
And profitability is the primary objective of activist funds
Rodolphe Durand is a professor at HEC, and co-author of a study on these funds:
“
Activist funds are funds which, as their name suggests, raise funds from investors -
people who have
wealth. 'money or institutions
- promising them a very high return on investment.
When an activist fund enters the capital of a company, it changes the activity portfolio, it often changes the teams and it creates value.
It is true that over the first 18, 24 months, there is an increase in the market value of the company. But when you go on to the third, fourth, or fifth year and compare with a similar company, in the same industry, the same size, about the same portfolio, that would not have been attacked, the value of the company attacked is ultimately weaker than one that was not attacked. This is why they are sometimes called "short-termists" and this is exactly the mandate given to activist funds.
"
Faced with the sling of shareholders, Emmanuel Faber, a practicing Catholic and father of three children, suggests that it is his CSR vision, a responsible company, that the funds are attacking when they had voted for 99%.
The study conducted by Rodolphe Durand shows that these funds specifically target companies with a mission, but this is not systematic
.
“
We have to get out of the shortcut a little, with on the one hand the nice companies that have a reason for being and who are doing CSR, and on the other the bad financials who attack them because they do CSR .
This is wrong on both sides.
Investment funds attack companies that do CSR without making a profit.
They accuse them of using CSR to hide behind their little finger and of failing to deliver shareholder value as they should and as their competitors are.
When the CSR policy contributes to the creation of value for the company, and in return for its shareholders, they do not attack it
”,
assures Rodolphe Durand.
Emmanuel Faber is now replaced by Gilles Schnepp, the former CEO of Legrand, the manufacturer of electrical equipment.
When he left, he posted a message of thanks to his teams on the professional network LinkedIn, which generated tens of thousands of supporters.
Newsletter
Receive all international news directly in your mailbox
I subscribe
Follow all the international news by downloading the RFI application
google-play-badge_FR
France
Economy
Food
On the same subject
Danone: CEO Emmanuel Faber ousted after a sling of shareholders