The board and the management of EssilorLuxottica (Essilux) have returned to the task of integrating the operations of Essilor International and the Luxottica Group after resolving a serious governance issue that was threatening to shake up the relations among their key shareholders.
Leonardo Del Vecchio, executive chairman of Essilux, and Hubert Sagnières, executive vice-chairman, buried the hatchet in their struggle for equal representation on the board of the group a few days ahead of the annual general meeting of the group's shareholders on May 16.
Del Vecchio's holding company, Delfin, reached a settlement with the board that set aside all existing claims and legal proceedings including the recourse to an arbitrator (see the previous issue of Eyewear Intelligence). Delfin is the group's largest shareholder with a stake of 32.5 percent and 31 percent of the votes.
As part of the settlement, Francesco Milleri, deputy chairman and chief executive of Luxottica, and Laurent Vacherot, CEO of Essilor, informed the board of directors of Essilux that neither of them will be a candidate for the position of CEO of the new group. Del Vecchio had insisted that Milleri be appointed to the post, but Sagnières voiced his opposition to his nomination, indicating that he would have preferred Vacherot. The recruitment process for Essilux' future CEO has been confirmed.
Vacherot, who turned 63 last month, has spent the last 27 years at Essilor. He became chief financial officer of the company in 2010 and chief operating officer at the end of 2016, adding the title of president. The 60-year-old Milleri was deeply involved in the merger between Luxottica and Essilor. He has acted since 2007 as the right-hand man of Del Vecchio, now 83, who touted him as his successor. He was made CEO of Luxottica at the end of 2017.
Following the settlement, Valoptec, which represents a large part of Essilor International's staff, agreed to withdraw a proposal for the appointment of an additional director at Essilux' annual meeting, and to vote against proposals made on April 18 by certain institutional investors for the election of two additional directors.
Like Valoptec, the investors were concerned that the balance of power within the group would have been compromised if Delfin had its way. Their requests would have raised the number of directors on Essilux' board from 16 to 19. Following the settlement between the Italian and French camps, Essilux' shareholders rejected the proposals for the enlargement of the board and approved all the 18 resolutions on the agenda of the ordinary and extraordinary general meetings held on May 16.
In line with the settlement reached between Del Vecchio and Sagnières, Vacherot, CEO of Essilor, was also made a director of Essilux, replacing another director, Bernard Hours, who resigned. The Frenchman will thus have the same position as Milleri, the Italian favorite of Del Vecchio, who was already a member of the board. Vacherot has also become a member of the board's Strategy Committee along with other representatives of the various stakeholders.
Del Vecchio and Sagnières said they have empowered Milleri and Vacherot to develop and implement Essilux' strategy and integration process, accelerating the simplification of the new group by integrating the two operating companies within the next 12 to 24 months. They have both approved the appointment of key executives for the group's central functions.
After the general meeting, Sagnières said the group was now in a better position to increase its growth, take advantage of emerging opportunities and deliver on its mission. Del Vecchio came out of the meeting with a strengthened belief “that this combination is destined to redefine the entire industry for the benefit of all its stakeholders.”