EssilorLuxottica, the world's largest eyewear group, has moved to quell investor unrest by reaffirming its full support for CEO Francesco Milleri. The board's unanimous vote of confidence comes after Leonardo Maria Del Vecchio, son of the late founder Leonardo Del Vecchio, publicly urged the company to rethink its strategy and improve how it communicates with shareholders.
The endorsement is a clear signal that the board stands behind Milleri, who has led the company since 2020. But the public disagreement with a member of the founding family has put a spotlight on the company's governance and its recent stock performance.
Who is Francesco Milleri?
Francesco Milleri has been at the helm of EssilorLuxottica for several years, overseeing the integration of the French lens maker Essilor and Italian frame maker Luxottica, which merged in 2018. He is also chairman of Delfin, the holding company that controls the Del Vecchio family's stake in the group. That dual role has drawn criticism from some investors who see a potential conflict of interest, as Milleri effectively answers to himself in his capacity as Delfin's chairman.
Milleri's leadership has been marked by a focus on digital transformation and expanding the company's direct-to-consumer business. However, the stock has fallen sharply in recent months, which has fueled dissatisfaction among some shareholders.
The Del Vecchio family's influence
Delfin, the Del Vecchio family's investment vehicle, holds a 32.4% stake in EssilorLuxottica, making it the company's largest shareholder. Leonardo Maria Del Vecchio, who owns 12.5% of Delfin, has been vocal about his concerns. In a recent statement, he called for a "new chapter" for the company, suggesting that the current strategy is not delivering the results investors expect.
His comments echo a broader sentiment among some investors who believe the company needs to do more to explain its long-term plans and address the stock's decline. The tension highlights the delicate balance between the founding family's influence and the company's independent governance.
What this means for investors
For everyday investors, this episode is a reminder that even large, established companies can face internal disagreements that affect their stock price. The board's backing of Milleri provides some short-term stability, but the underlying issues remain: the company's stock has been under pressure, and there are questions about its growth strategy.
Investors should watch for any signs of a strategic shift or changes in communication from the company. The board's statement suggests that Milleri will continue to lead, but the public criticism from a member of the founding family could lead to further scrutiny of the company's decisions.
It's also worth noting that governance disputes like this are not uncommon in companies with a dominant founding family. In such cases, the outcome often depends on whether the family can align on a common vision. For EssilorLuxottica, the next few months will be crucial in determining whether the company can regain investor confidence.
For those holding the stock, the key is to stay informed about any announcements regarding strategy or leadership changes. As with any investment, it's important to consider the long-term fundamentals rather than reacting to short-term noise.
In the broader context, this story is part of a larger trend of activist investors and founding families challenging corporate leadership. Similar battles have played out at other companies, such as the board control fight at Korea Zinc and the restructuring test at Volkswagen. These cases highlight the growing importance of shareholder engagement and governance in today's markets.
For now, EssilorLuxottica's board has drawn a line in the sand, but the debate over the company's direction is far from over. Investors will be watching closely to see how the situation evolves.
