Danone Bows to Investor Demand to Split Chairman, CEO Roles

Bookmark

Mar 02 2021, 2:16 AMMar 02 2021, 4:25 AMMarch 02 2021, 2:16 AMMarch 02 2021, 4:25 AM

(Bloomberg) -- Danone will separate the roles of chairman and chief executive officer in an attempt to alleviate pressure from shareholders who have called for management change at the world’s largest yogurt maker.

Emmanuel Faber, 57, who has held both positions for the past three years, will give up his role as CEO as soon as a successor is appointed, the maker of Activia yogurt said late Monday. The process to recruit a new CEO has been started, and the company said the board unanimously supports Faber, who will focus on his role as non-executive chairman following the split.

A rising chorus of shareholders, including Artisan Partners Asset Management Inc., Causeway Capital Management and Bluebell Capital Partners, called for a management shakeup in recent weeks. Danone’s shares lost a quarter of their value in 2020 and sales fell for the first time in more than 30 years, increasing pressure on Faber.

Read more: Danone Investor Artisan Seeks Urgent Change to Avoid Damage

“I am pleased we took the governance arrangements that will allow us to anticipate the next phase of development,” Faber said in the statement.

With the aim of strengthening oversight, Danone’s board also appointed Gilles Schnepp as vice chairman, alongside Cecile Cabanis, the company’s former chief financial officer. Schnepp’s role as lead independent director will be transferred to Jean-Michel Severino, who also acts as head of the governance committee. Bluebell Capital last week had identified Schnepp as a possible chairman candidate last week.

Artisan Partners said it has taken note of the latest developments and will respond in due course.

Danone has spent years trying to revive dairy sales, and in 2020 the pandemic hit it harder than rivals. The producer of Evian water started a strategic review in October and announced plans to cut as many as 2,000 jobs in November.

Since becoming CEO in 2014, Faber has tried to improve Danone’s environmental and social credentials -- the company made its Evian bottled-water brand carbon neutral last year -- while also attempting to fix its ailing yogurt business.

After spending more than $10 billion to buy nondairy producer WhiteWave in 2017, alternative products made from soy and oats have yet to offset a drop in demand for traditional dairy yogurt. Danone has also had a series of organizational changes in the last seven years, which Artisan Partners said is disruptive. The company has changed how it reports earnings on its categories and geographies several times, and replaced its chief financial officer in October.