Richemont Investors Reject Activist's Attempt to Elect Former LVMH Executive to Board -- Update

By Joshua Kirby

Compagnie Financiere Richemont SA on Wednesday welcomed shareholders' decision to vote against electing a board candidate proposed by an activist investor in favor of an ally of the Swiss luxury-goods group's chairman.

Incumbent Nonexecutive Director Wendy Luhabe was elected with a compelling majority, Richemont said. Ms. Luhabe was proposed by management as a representative of holders of 'A' shares in the company in response to a proposal by investor Bluebell Capital Partners to elect Francesco Trapani to the position.

Mr. Trapani wasn't an appropriate candidate for the board, Chairman Johann Rupert said in a letter to shareholders ahead of the vote, given his closeness to luxury-sector rival LVMH Moet Hennessy Louis Vuitton SE. Mr. Trapani was chief executive of jeweler Bulgari when it was bought by the French giant in 2011, and went on to serve as an executive and advisor within the group.

"The board may not responsibly recommend to shareholders to let a person who has a long history of association with [LVMH]... become a director of our company and intervene in our company's decision-making process," Mr. Rupert said.

Under the group's structure, 'A' shareholders hold the majority of the company's share capital, but the Rupert family controls 50% of voting rights through their possession of 'B' shares.

Mr. Rupert noted Ms. Luhabe's qualifications to represent 'A' shareholders. A nonexecutive director of Richemont since 2020, she is also nonexecutive chairman of South Africa's Pepkor Holdings Ltd., and has extensive experience across several industries and in diversity and inclusion, Mr. Rupert said.

Shareholders meanwhile also rejected a Bluebell proposal to change the composition of Richemont's board, which would have raised the minimum number of members to six from three. Under the proposals, each board member would have been designated a representative of 'A' or 'B' shareholders, with an equal number of representatives for each.

Mr. Rupert welcomed the vote against the proposals to change the board.

"The board believes the current governance structure has underpinned Richemont's performance, allowing the group to take a long-term view on sustainable value creation, unencumbered by short-term considerations," he said.

"We recognize, however, that there are reservations about aspects of our governance, which we will continue to address," he added.

Write to Joshua Kirby at [e-mail]; @joshualeokirby

(END) Dow Jones Newswires

September 07, 2022 11:59 ET (15:59 GMT)

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