In an announcement on Monday, Danone SA (EPA: BN) said that Emmanuel Faber will exit the role as the CEO and chairman of the company after excessive pressure from shareholders.
Danone shares that you can learn to buy online here jumped close to 5% in premarket trading on Monday. Including the price action, the stock is now trading at £51.98 per share. In comparison, the Barcelona-founded company had started the year 2021 at £46.61 per share.
Faber wanted to keep his role as chairman
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Previously, Faber had expressed plans of stepping down as the CEO only but keeping his role as chairman to try and satisfy critics. On Monday, however, the Paris-headquartered company said Gilles Schnepp (recently appointed director) will immediately replace Faber as the chairman. Danone said:
“The immediate priority of the new chairman, together with the Board, will be to lead the transition, including the search for a new CEO. Danone has appointed an international search agency to support the process.”
In recent months, Danone faced growing pressure from several shareholders, including activist investor Bluebell Capital and investment fund Artisan Partners, who demanded Faber to relinquish his roles and the company at large to commit to improving returns.
Danone shareholders had also nodded for Schnepp, who has previously served at the French industrial group, Legrand, to be named the new chairman. Bluebell Capital commented on the news on Monday and said:
“Of course, the job starts now with the Board due to appoint a top-class CEO. We are confident that under the leadership of Mr Schnepp, a profitable growth trajectory will be restored at Danone whilst also keeping focus on sustainability.”
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Danone’s performance also took a hit due to COVID-19 disruptions
Apart from a few strategic decisions that were heavily criticised, including a lack of discernible investment in valuable segments like marketing, Danone’s performance also took a hit from the ongoing Coronavirus pandemic that disrupted operations and weighed on demand.
In separate news on Monday, British-American cruise operator, Carnival Corp said that it will take at least until 2023 for the cruise industry to recover completely from the COVID-19-driven hit to travel and tourism.
Danone performed fairly downbeat in the stock market last year with an annual decline of more than 25%. At the time of writing, the multinational food-products corporation is valued at £35.71 billion and has a price to earnings ratio of 20.26.
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