From: Tara-Jane Fraser <Tara-Jane.Fraser@bailliegifford.com>
Date: 7 May 2019 at 18:19:42 BST
To: Andrew Cave <Andrew.Cave@bailliegifford.com>
Subject: EssilorLuxottica 2019 AGM

Dear CII Member,

 

We wanted to make you aware of the filing of two shareholder resolutions on the agenda of the upcoming Shareholder’s Meeting of EssilorLuxottica on May 16, 2019. 

 

We call on shareholders to support two proposals for the installation of a new independent Director, Proposals A and B (there is also a separate, additional shareholder proposal that we have not filed). See full details of the filing here.

 

Since last March, the process of integration of Essilor International and Luxottica appears to have been materially impacted by a reported discord between Executive Chairman Leonardo Del Vecchio and Executive Vice-Chairman Hubert Sagnières, both invested with equivalent powers in the Articles of Association and the Rules of Procedure of the Board of Directors of the new company EssilorLuxottica. 

 

These governance challenges have become a matter of public record through the filing of a Request for Arbitration at the International Chamber of Commerce in Paris (ICC), the outcome of which would not occur before 2021.

 

We recommend that shareholders support the proposals for two new independent Directors (Proposals A and B):

• The appointment of two additional independent Directors would increase the number of Board members to eighteen, as permitted by the company's Articles of association. Wendy E. Lane and Jesper Brandgaard have extensive experience in leading and supervising multinational companies with governance skills. Both have a strong knowledge of business in the North America, which accounts for more than half of EssilorLuxottica's business. Finally, they both enjoy the freedom of independent view and have shown a real interest in helping to get EssilorLuxottica out of its governance crisis.

 

EssilorLuxottica requires a break to the current status quo which has led to the Request for Arbitration: 

• A long lasting position of entrenchment between the different parties would be likely to be harmful to all stakeholders.  
• The ongoing process of recruiting an outstanding CEO is a key element to the success of the EssilorLuxottica group, and this is likely to be hampered by the ongoing governance challenges at the company. 
• We believe that the appointment of two new unaligned independent Directors, not bound by the initial agreement of the merger, would help to support  a more constructive and unified position in the boardroom, and to help the board to focus on long-term value creation at the combined company. 

 

We therefore urge shareholders to vote FOR Proposals A and B.

 

 

 

 

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