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Nestle chairman defends long-term strategy in face of shareholder activist

Nestle chairman defends long-term strategy in face of shareholder activist
FILE PHOTO: The Nestle logo is seen during the opening of the 151st Annual General Meeting of Nestle in Lausanne, Switzerland April 12, 2018. REUTERS/Pierre Albouy   -   Copyright  Pierre Albouy(Reuters)
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By Jessica DiNapoli

DAVOS, Switzerland (Reuters) – Nestle SA chairman Paul Bulcke said on Friday he would not pursue short-term efforts at the expense of long-term success, in the face of scrutiny from shareholder activists who know how to “pressure-point you and tease.”

Hedge fund Third Point LLC, run by shareholder activist Daniel Loeb, took a $3 billion stake in Nestle in 2017, and has said that the maker of KitKat bars and Perrier water could double its earnings per share by 2022 if it splits up its businesses.

“If the capacity of delivering is there, we should. If it jeopardizes my future thinking, and if it compromises my future success, we should not do this,” Bulcke said at the World Economic Forum in Davos.

“It’s my job to explain that, to go around, talk to investors and listen to all of them, also him.”

Bulcke did not mention Loeb by name on the panel on corporate agility on the final day of the week-long conference in a Swiss ski resort town. A Swiss journalist had asked Bulcke how he deals with answering to a New York hedge fund demanding earnings growth.

“He’s one investor, we have many others,” said Bulcke, who served as the CEO of Nestle from 2008 to 2016.

(Reporting by Jessica DiNapoli; Editing by Mark Trevelyan)

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