A boardroom shake-up at the food giant Danone sets off shareholder infighting.

Emmanuel Faber, the chairman and chief executive of the French consumer group Danone, abruptly left the company on Monday under pressure from activist investors. Now, shareholders of the company, which owns Evian and several yogurt brands, including Dannon, are fighting among themselves about it.

CtW, an adviser to union pensions with more than $250 billion in assets, sent a sharply worded letter to Artisan Partners, the firm that led the revolt over Mr. Faber’s leadership. The twist in the letter, which was reviewed by the DealBook newsletter, is that CtW owns a “substantial” number of Artisan shares — and said that the fund needed the sort of governance shake-up it pushed for at Danone.

Artisan had criticized Danone’s performance versus competitors like Nestlé and Unilever, calling for boardroom changes, including someone other than Mr. Faber becoming chairman. Mr. Faber had been chief executive since 2014 and added the chairman role in 2017. Danone said at the beginning of the month that it would search for a new chief executive, but Mr. Faber would remain as chairman. Mr. Faber shed both of those roles on Monday.

“The appointment of new leadership and better corporate governance will strengthen the company for the benefit of all stakeholders,” Artisan said in a statement on Monday welcoming Mr. Faber’s departure.

CtW says Artisan’s own policies are inconsistent with its demands for Danone. Notably, one person, Eric Colson, serves as Artisan’s chairman and chief executive. “Artisan’s call for an independent chair at Danone while maintaining the positions of C.E.O. and chair combined on its own board is inconsistent with best governance practices,” wrote Dieter Waizenegger, CtW’s executive director. He also questioned the firm’s use of “large discretionary cash bonuses” and demanded a discussion with Artisan’s management by the end of the month.

Artisan did not respond to a request for comment.

Danone, which reported $28 billion in sales in its latest fiscal year, was the first public company to adopt the French legal framework of “Entreprise à Mission,” which allows companies to take greater consideration of social and environmental issues in their business model. Some 99 percent of shareholders, but not Artisan Partners, approved the move in June last year.

The turmoil raises the question whether business models that take all stakeholders into account can survive resistance from activist investors focused primarily on shareholder returns. Danone said in a statement announcing the management changes that it “believes in the necessity” of combining “high economic performance” with Danone’s “unique model of a purpose-driven company.”

Source Article