LONDON — The gloves are off at Compagnie Financière Richemont.
The parent of brands including Cartier, Van Cleef & Arpels and Panerai is urging shareholders to vote against a proposal by the activist investor Bluebell Capital Partners to install Francesco Trapani to the board as a representative of the “A” shareholders.
The corporate giant is proposing its own candidate instead — board member and independent director Wendy Luhabe.
Richemont said in a brief statement Monday that it would put Bluebell’s requests to a vote at the annual general meeting set for Sept. 7 in Geneva, but it’s clearly not happy about them.
“After careful consideration, the board recommends to vote against the designation of Bluebell’s candidate as representative of the holders of ‘A’ shares, and against the election of that person to the board,” Richemont said.
The board is also asking shareholders to vote against the various changes to Richemont’s articles of incorporation proposed by Bluebell. Richemont said it would provide further information in its letter to shareholders before the AGM.
Bluebell declined to comment on Monday.
As reported, Bluebell wants to reshape Richemont in the medium term and is lobbying for changes to corporate governance, better board representation for minority shareholders and a strategic focus on hard luxury.
Its initial request is for more board representation for the holders of Richemont’s “A” shares, which are publicly listed on the SIX Swiss Exchange. Bluebell wants to install Trapani, a hard luxury expert, entrepreneur and seasoned activist investor.
At Richemont, there are 522 million “A” shares, and 522 million “B” shares in issue. The “B” ones are not listed, but held by Compagnie Financière Rupert, which belongs to Johann Rupert, Richemont’s founder and chairman.
Rupert controls 10 percent of the company’s capital, and 51 percent of its voting rights. Although a management team runs Richemont, Rupert remains deeply involved in, and committed to, the business.
As reported, while some of Richemont’s Board members own “A” stock, there is no specific representative of “A” shareholders currently on the board.
According to Swiss law, each shareholder class is entitled to have at least one representative on a board of directors. Richemont’s own articles of association say that holders of “A” shares and “B” shares each have the right to appoint one representative to the board.
It is understood that, until now, no request has ever been made by a shareholder to exercise that right of the “A” share class to appoint a representative.
In addition to blocking Bluebell, Richemont’s proposal of Luhabe as the “A” representative dovetails with its commitment to new, and higher, environmental, social, corporate governance and diversity, equity and inclusion standards.
It also shows that Richemont is open to change, and that it’s listening, albeit partly, to activist shareholders.
One luxury investor who declined to be named said while Bluebell’s wish list for Richemont “makes a ton of sense,” Rupert might not want “Trapani — another silverback, male luxury CEO — on the board.”
Luhabe was elected to the board in 2020 and serves as a non-executive director and a member of the board’s nominations committee.
She has a long relationship with Richemont, chairing Vendôme South Africa, Richemont’s subsidiary in the region, from 2001 to 2011.
Richemont has described her as a social entrepreneur and economic activist “with multiple honors for her pioneering contribution to the economic empowerment of women in South Africa.”
She is the founding chair of Women in Infrastructure Development and Energy, which focuses on the economic empowerment of women, and of Bridging the Gap, an organization that equips black graduates with corporate skills.
She is also the founder of the Women Private Equity Fund, South Africa’s first private venture capital fund for women, and helped to start Women Investment Portfolio Holdings, which empowers women to become investors in the South African economy.
Luhabe also created the Wendy Luhabe Foundation and established a scholarship at the University of Johannesburg.
In addition to the board nominations, Richemont is also proposing an ordinary dividend of 2.25 Swiss francs per “A” share and 0.225 Swiss francs per “B” share, and an additional special dividend of 1.00 Swiss francs per “A” share and 0.10 Swiss francs per “B” share.
The board is also proposing the reelection of all its members for a further one-year term, with the exception of Ruggero Magnoni and Jan Rupert, who had already informed the board that they would not seek reelection.