PARIS — The appointment Thursday of Nicolas Hieronimus as L’Oréal’s deputy chief executive officer, placing him second in command, has amplified industry buzz over whether he’s the heir-apparent to one day step up to the beauty giant’s top post.
Jean-Paul Agon, L’Oréal’s chairman and ceo, revealed Hieronimus’ promotion to the newly created role during the group’s annual general meeting here. He is currently president of the company’s Selective divisions and in his new post will now also oversee the Consumer Products division.
“The goal is to strengthen the overall and transversal vision of the four global divisions who are confronted with new challenges in this constantly changing world,” L’Oréal said in a statement.
Asked whether succession plans are under way, a company spokeswoman told WWD Thursday night: “Jean-Paul Agon’s succession is not on the agenda. Jean-Paul Agon has stated in the past his intention to remain ceo until the statuary age limit of 65, subject to the board’s agreement.”
Agon is 60 years old.
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Still, industry sources wondered whether Hieronimus isn’t being gently groomed over a number of years to take over the company’s helm, in a similar fashion to how Agon was by his predecessor, Lindsay Owen-Jones. And his new role continues his meteoric ascent at the group.
Eva Quiroga, an analyst at Deutsche Bank, referred to “how quickly he has risen through the ranks, from head of Professional in 2008 to head of Selective, roughly half of group sales, in 2013.”
She also lauded the executive for the way he’s managed the L’Oréal Luxe division over the last few years, “consistently delivering best-in-class growth — between 2011, when he was put in charge of L’Oréal Luxe, and 2016, he delivered average organic top-line growth of 7.2 percent, versus plus 4.6 percent for the group overall.”
Yet, some industry sources question whether Hieronimus’ age wouldn’t be a stumbling block if he were to be named the head of L’Oréal in five years’ time, when he would be 58.
“Clearly, L’Oréal takes succession very seriously. At the end of the day, they had four-and-a-half ceo’s — one of them merely facilitated a transition for a couple of years — in more than 100 years. And [the company] ensures that the next ceo is identified early on and introduced carefully — as had been the case with both Owen-Jones and Agon, and key to the group’s success in my view,” Quiroga said.
The appointment of Hieronimus wasn’t the only major decision made at L’Oréal’s general meeting. The company’s board of directors also made a last-minute decision to withdraw from a vote the slated resolution regarding a stock split.
Agon said dividing the stock in half could, in certain cases, result in negative fiscal consequences for shareholders. L’Oréal therefore has asked for further information regarding the impact from the French administration.
L’Oréal’s board withdrew the resolution, which will be up for discussion and for possible vote next year.
The company’s stock, which trades at 182.85 euros, or $196.88 at current exchange, on Paris’ CAC 40, has not been split since 2000.
The resolutions up for vote at the annual general meeting were approved. These include Agon’s remuneration for 2016, which was raised to 4.2 million euros, or $4.5 million. The executive is eligible for 32,000 performance shares in four years.
Françoise Bettencourt Meyers, granddaughter of L’Oréal’s founder, Eugène Schueller, had her seat on L’Oréal’s board renewed for another four years, as was that of Virginie Morgon, who is deputy ceo of Eurazeo.
Paul Bulcke was approved to replace Peter Brabeck-Letmathe — his predecessor at the helm of Nestlé — as vice chairman of L’Oréal’s board.
It was decided that a dividend of 3.30 euros, or $3.54, per L’Oréal share — representing an on-year increase of 6.5 percent — would be distributed on May 3. At the same time there will be a dividend of 3.63 euros, or $3.90, paid out for each share that had been continuously registered for at least two years.
During a meeting held after the general meeting, company board members agreed on the cancellation of the 2,846,604 shares acquired during the buyback program they had green-lighted on Feb. 9.