Bernadette Chirac, a new independent director at LVMH !

Bernard Arnault, the Chairman & CEO of the French luxury goods group LVMH, always very cheeky with his shareholders, decided to propose another candidate at the Annual General Meeting with the election of the former French First Lady, Mrs Bernadette Chirac. The former First Lady was elected at 82% by shareholders at the AGM that took place on 15 April in Paris.. We feel sorry for Hélène Carrère d'Encausse, the Secretary of the Académie Française, the very conservative French institution guardian of the French language, as she had to forsake the job since Bernard prefers Bernadette…

Proxinvest had recommended shareholders to support the re-election of Hélène Carrère d'Encausse. But ‘Surprise!’, Bernard Arnault which controls the group with a shareholding of 47,38% proposed the new famous candidate instead, on the actual day of the shareholders’ meeting!

Bernard Arnault is certainly a very efficient tycoon and he shows little respect for LVMH shareholders, especially regarding self-dealings: his company participated in the vote approving the acquisition of one of his private companies by LVMH. Indeed, LVMH acquired 50% of his stake of the best St Emilion winery, Le Château Cheval Blanc for €238 million. We note that the stake had been acquired for €66 m in 1998 and its integration process with LVMH has increased its value to €151 m over ten years. Knowing that Raymond James’ analysts quoted by les Echos in August 2009, stated that the price would never exceed €200 m, we wonder how objectively the transaction was conducted as LVMH finally paid €238 m for the remarkable wine. We note that there is only one other woman on the Board, Delphine Arnault which is of course the CEO’s daughter. Being on the Board of LVMH might teach Bernadette Chirac how entrepreneurs endlessly increase their wealth while shareholders are discouraged, with the outlook for investments and jobs looking grim.

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