Pernod-Ricard : riding high on the coattails of strong financial results
On November 9, shareholders gathered within the walls of the vast Salle Pleyel in Paris’ chic 8th arrondissment. The storied Art Deco concert hall, home of the Orchestre de Paris, played host to the Annual General Meeting (AGM) of famed French wines & spirits distiller, Pernod Ricard. True to form, Proxinvest analysts descended upon the AGM to chronicle the events of the day. Alexandre Ricard, scion of the Ricard Family, took to the stage in his capacity as Chairman and CEO to profusely thank his employees for achieving growth, year after year, reflecting the company’s expanding footprint in its key growth markets (US, China, India…). The crowd was regaled with impressive tales of organic growth, cash flow generation, and debt reduction; staples of a conventional AGM. The results, however, belied a track record of chronic underperformance (on notable operational metrics) vis-à-vis market leader Diageo Plc and the failure to uphold corporate governance best practices. Time and again, Proxinvest has publicly spoken out against the company’s practice of combining the CEO and Chairman positions (since 2015), the disproportionate number of Board seats held by its largest shareholders, and most importantly, its use of double voting rights with excessive terms (after a 10-year holding period). Unsurprisingly, this has made the maker of the famed eponymous pasitis one of the least shareholder-friendly companies in the CAC 40. […]
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