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On Friday Louis Dreyfus Commodities, one of the principal operating segments of the giant, and privately held, Louis-Dreyfus Holding BV, announced another change in its top management, which has been something of a revolving door in the last year or two.
Last June, Ciro Echesortu finally became CEO of the commodities unit, having been their COO and head trader for a number of years previously. Then in October, 2013 Serge Schoen, his predecessor as CEO was appointed Chairman of the Supervisory Board of Dreytfus commodities, moving to a new strategy role.
Now the company is making it clear that the ascension of Echesortu was only a temporary one. As Margarita Louis-Dreyfus, Chairperson of Louis Dreyfus Holding, and the company’s controlling shareholder puts it, “One year ago, we agreed with Ciro Echesortu to begin a transition under his leadership, aiming to adapt our strategy and accelerate the Group’s transformation, in order to reinforce our leading position in the industry, ”
She continued, “Thanks to our solid performance in 2013, the conditions are now right to implement a longer-term solution and the Supervisory Board has therefore initiated an active search process for the new CEO. Ciro has asked to step back from his current role and will focus on reinforcing and adapting the company’s strategy through the next stage of the transition period. Ciro has been instrumental in our success for many years, and I would like to thank him for this great achievement and for having supported the evolution of our management structure in the past year very effectively.”
Reading between the tea leaves is not always easy in any corporate reshuffle, particularly one as private as the Louis Dreyfus group is, or in any company with almost US$64 billion in sales for that matter, which the group achieved in 2013 with close to US$640 million in net profits to boot, down from just under US$1 billion in 2012 but still substantial.
However, there are some signs that this represents yet another marker along the road of Margarita Louis-Dreyfus’ taking complete charge of the storied company, which was was founded by Leopold Louis-Dreyfus in 1851, since the death of her husband Robert Louis-Dreyfus after a long battle with leukaemia in 2009.
As a newly widowed heiress to her husband’s 61% stake in the company, held on behalf of her three children for whom she holds the shares in a trust until they are 25, in 2009 there were a number of obstacles to overcome to cement her hold on the business. Other family members apparently held another 19% and about 20% had been traditionally reserved for members of management.
Since 2009 Margarita Louis-Dreyfus has gradually increased the trust’s holdings to about 65%, according to an interview with her last October in the Swiss newspaper Neue Zuercher Zeitung am Sonntag, or the Sunday edition of the New Journal of Zurich. Zurich is also where Margarita Louis-Dreyfus still resides.
One by one, some of the older entrenched management – commencing with the former President of the commodities unit, Jacques Veyrat who left in 2011, seem to have been pushed to the sidelines. In 2011 Margarita Louis-Dreyfus became Chairperson of the Supervisory Board of the top holding company Louis Dreyfus Holding BV herself, which is, after all is said and done the most important one, and demonstrated firmly who was now in charge.
Then last year Schoen was himself sidelined by Louis-Dreyfus, after having served as CEO of the commodities unit for eight years, in favour of Echesortu. Eschesortu is now moving functionally to a similar “strategy” role that Schoen was exiled to as Chairman of the commodities unit’s Supervisory Board, where he still sits. Echesortu has now been replaced on a temporary basis by the current CFO Claude Ehlinger while they look for a permanent replacement.
Schoen’smis-step was perhaps to have been one of promoting the idea of taking the group public, something at one time anathema to both Margarita and her deceased husband Robert, as it would lead to dilution of her family interest. Instead she sold the energy business in 2012 and floated a public bond issue.
On the other hand having grown its revenues 400% since 2006, public markets do have continuing attraction as a source of capital for future growth. Earlier this month, the group announced the appointment of three new members to its supervisory board, including the Chairman of the board of Syngenta and a former partner at Goldman Sachs & Co. Such distinguished additional leadership could well be a precursor to the greater transparency requirements of a public offering therefore.
Also Margarita Louis-Dreyfus said last month that the group was, “while maintaining the spirit of a family company… now aligning our business model and operations more closely with those of a publicly-listed company”.
So perhaps both theories have some merit, without necessarily being mutually exclusive.
If you visit the Louis Dreyfus holding company website today, and go to the governance page you will find a large photograph of a competent and very much in charge looking Margarita Louis-Dreyfus.
Having studied Law at Moscow State University and Economics at the Leningrad Institute of Soviet Trade before her marriage, to date she has amply fulfilled the confidence placed in her, by her late husband Robert, in charting a path for the future to preserve shareholder control, which they had put together once he learned he had leukaemia.
The October interview with the Zurich paper had also indicated Margarita Louis-Dreyfus was actively interested in her trust acquiring more of the company’s shares from family members who might sell. One can certainly hypothesize therefore this could include buying back, retiring managers’ shares as well.
Margarita’s late husband, Robert was a French businessman, the grandson of the firm’s founder Leopold, and they lived together with their family in Zurich. Robert had also had enormous success as Chief Executive Officer of both Adidas-Salomon and of advertising firm Saatchi & Saatchi. His cousin Julia became one of the top stars of the comedy show Seinfeld.
Today Margarita Louis-Dreyfus also controls two football clubs L’Olympique de Marseille and Standard de Liège in which her husband had been involved. Forbes billionaires list estimates her personal family net worth at $8.8 billion currently.