Nestle chairman Paul Bulcke says 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, run by shareholder activist Daniel Loeb, took a $3bn (€2.63bn) 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 jeopardises my future thinking, and if it compromises my future success, we should not do this,” Mr 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.”
Mr Bulcke did not mention Mr 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 Mr Bulcke how he deals with answering to a New York hedge fund demanding earnings growth.
“He’s one investor, we have many others,” said Mr Bulcke, who served as the chief executive of Nestle from 2008 to 2016.
The firm opened a research and development centre at its Limerick manufacturing facility this week after an investment of €27m.
About 40 research staff are employed at the new centre, co-located with Nestlé’s Wyeth Nutrition manufacturing plant, which produces infant milk powder.