EssilorLuxottica - A True Governance Deadlock

SquareWell Partners supported the institutional investor group (which included investors like Comgest, Baillie Gifford, and Fidelity International) with their campaign to make their concerns heard regarding the governance deadlock at EssilorLuxottica following the announcement of the EUR 54 billion combination of equals. The institutional investor group argued that a prolonged governance deadlock would weaken the Company’s reputation, employee morale, ability to attract qualified candidates for the role of CEO to lead the integration efforts and delivering on communicated synergies.

The institutional investor group’s proposals to add two independent directors to provide independent perspectives and improve its functioning to facilitate a successful integration of the two businesses was overwhelmingly supported by the disinterested shareholders. Though the proposals fell short of getting the required majority, due to the presence of a “controlling” shareholder owning c.35% of EssilorLuxottica, shareholders’ concerns were heard and the pressure to ensure a successful integration remains.

You can read more about the campaign here.