Danone shareholder demands removal of CEO amid shakeup

Danone has come under renewed pressure to shake up its management as one of its largest shareholders is putting pressure on the company's board to remove CEO Emmanuel Faber and control a number of policies he introduced amid low sales.

On Thursday US-based Artisan Partners, which holds a 3% stake in Danone - and is the third-largest shareholder for the company overall - urged the French foods company to split the chairman and executive roles both of which are held by Faber. These calls now appear to have escalated into the calls for him to be ousted.

Read more: Danone to cut 2,000 jobs in Covid reshuffle

Danone has suffered due to the ongoing coronavirus pandemic and has seen weak returns in response, which prompted this shareholder reaction.

Artisan presented its plan of action to board members on Tuesday, which included plans to halt the company reshuffle organised by Faber, as well as considering which underperforming brands to sell.

The plan was the brainchild of Jan Bennink, who previously worked in Danone's dairy and medical nutrition units.

Bennink has been working with the US-based investor since October with the goal of analysing remedies for the company's major problems.

In an interview with the FT, he said: “We gave the board our analysis since we want them to know what the business really looks like, as well as our wish list for changes that need to be made.

“Danone used to be an innovator that was early to new food trends, but they have lost that culture and are losing market share as a result.

“There has also been an enormous decline in advertising spending, which means they are not investing enough in their brands.”

A number of shareholders have highlighted their dissatisfaction with Danone's sales figures and many blame Faber for these numbers.

Every single Danone business outside of their home cleaning products - which saw a boom during the pandemic - has struggled during Covid owing to many of them being popular when people are out-and-about, such as in bars or restaurants.

Three weeks ago, activist investor group Bluebell Capital Partners urged Faber to step down from his role and also called for the roles of chairman and CEO to be separated.

The group said that its share price, which has decreased by 29% over the last 12 months, was driven down “by a combination of poor operational track record and questionable capital allocation choices."

However, Bennink has said the company's problems stem from before the pandemic and has said fixing them would require a complete overhaul of the executives and board for the food company.

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Addressing the board at the meeting, he added: “In the last seven years, you have had five organisational changes, which is disruptive and bad for business.

“The company needs new leadership as CEO, and we also want the chairman to be replaced with an outsider with consumer goods experience."

Artisan's plan also involves selling off underperforming brands.

This includes selling off or scrapping failing bottled water businesses while focusing on key brands and switching away from traditional milk and butter, Bennink added.

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