Sanofi said Monday that replacing CEO Chris Viehbacher is not on the agenda of a meeting to review quarterly results, despite a report in Les Echos suggesting that the board may discuss the executive's future. The company noted that the meeting is "mainly dedicated to the review of the quarterly results and there is no agenda item regarding the succession of Chris Viehbacher."
"Like any board of a publicly traded company, from time to time Sanofi's board meets in non-executive sessions to discuss a wide range of issues," the drugmaker said. Viehbacher took over as CEO at Sanofi in 2008 and oversaw the $20.1-billion acquisition of Genzyme in 2011. The executive has also trimmed the company's in-house R&D, whilst looking toward biotechnology, consumer and animal health to offset patent expiries on some of its products.
However, according to people close to the matter, while Sanofi's board supported these strategic decisions, some directors didn't agree with the way Viehbacher carried some of them out, Bloomberg reported. The sources suggested that relations with some board members and Viehbacher have also been strained by his conflicts with the French government over job cuts, disappointing earnings last year and the CEO's decision earlier this year to move to Boston.
Jerome Forneris of Banque Martin Maurel noted that Viehbacher "speaks his mind and he can be divisive, which doesn't necessarily create a good environment internally." Forneris suggested that "the French like the politically correct. The belief is you should never say publicly everything you think when you are the CEO of a company. The fact that Viehbacher speaks out annoys some people. For investors it’s different. It helps us know where the company is heading and gives us good visibility on the stock."
The people added that relations between Viehbacher and Sanofi's board became more complicated after inventory mismanagement in Brazil last year led the company to cut its profit forecast. However, the sources suggested that the board would have trouble justifying a management change, given how well the company's shares have performed and Viehbacher's success in overhauling the company.
Commenting on the news, Deutsche Bank analyst Mark Clark said Sanofi has "had massive efforts led by [Viehbacher] on the investor relations side, and they score highly on all the IR surveys." Clark added "he’s made Sanofi an investable stock, which it wasn’t before, because it was very Franco-centric management, very un-shareholder-friendly."
To read more Top Story articles, click here.