Summary

  • Arnault’s five children are all active within the group
  • Age limit for the CEO and chair roles has been extended to 85
  • LVMH says succession plans exist but will not be disclosed
  • Analyst says there is no clear evidence yet of a “succession discount”
  • LVMH will release annual results on Tuesday

PARIS, Jan 26 (Reuters) — A number of LVMH shareholders are pressing for greater transparency around Bernard Arnault’s plans for passing on leadership of the luxury conglomerate he has led for nearly four decades, warning that the absence of clear communication is becoming a growing risk for the company.

Arnault, who controls the roughly $350 billion group made up of more than 70 brands including Dior and Tiffany, has five children working within the business. Despite this, the 76-year-old has yet to name a successor and has shown no indication that he intends to step aside anytime soon.

Speculation around who will eventually take over from Arnault—France’s wealthiest individual—has circulated across corporate Europe for years. Last April, Arnault extended the age limit for holding the combined CEO and chair position for a second time, raising it to 85.

In their most pointed public remarks so far, some LVMH shareholders told Reuters that the lack of clarity around succession is now weighing on the group.

“Succession planning, as it stands, appears unclear and opaque,” said Stefan Bauknecht, equity portfolio manager at Deutsche Bank’s DWS, which ranks as LVMH’s 12th-largest shareholder according to LSEG data. “We want more transparency and a clearer roadmap for how leadership will evolve.”

“Ten years ago, succession wasn’t an urgent concern. Today, it has become a risk factor and contributes to a governance discount for the company,” said Ariane Hayate, European fund manager at Edmond de Rothschild in Paris, which also holds shares in LVMH.

LVMH, which is set to publish its annual results on Tuesday, told Reuters in detailed responses that succession plans for its executives are not made public, but said that such plans “obviously do exist,” without addressing Arnault’s position directly.

SUCCESSION RARELY ADDRESSED

Investors suggested that the latest extension of the age limit was likely intended to give Arnault more time to make a decision.

“They probably can’t provide clarity because he doesn’t yet have clarity himself,” said Paul Moroz of Mawer Investment Management, another LVMH shareholder. “You don’t really know until it happens, but the chances of a smooth outcome are probably low.”

Arnault has previously suggested that succession is not a priority for him at this stage.