Christian Dior: a reference in French code compliance!

Christian Dior, the luxury company which gathers each fall as shareholders at the prestigious Carousel of le Louvre, tends to take it easy with its compliance to the French reference code.

Proxinvest considers eleven members of its Board as not free of potential conflicts of interest while the company considers six of these as independent.
This is the case of Ségolène Gallienne, the daughter of Albert Frère, called independent director " despite having served on the Board of Directors of Château Cheval Blanc, part of the LVMH group " while she is a Communication Director for Dior Fine Jewelry, and the Annual Report of the company does not specify any existing ownership links between Groupe Arnault and the Frère family Belholding Belgium a holding of the Albert Frère family, reported to hold 18.08 % in the Groupe Arnault. In addition, Delphine Arnault, the daugther of Bernard, sits on the Board of M6 chaired by Albert Frère...

We smiled reading that " Mr. Eric Guerlain should be considered, taking into account personal circumstances, as an independent member notwithstanding his membership on the Board of Directors of the Company for more than twelve years and his tenure on the Board of Guerlain, a unit of LVMH ..."

Besides Christian Dior still does not give any details on the consulting contract of € 505,716 signed between the group and its former CF0, Denis Dalibot, representative of Arnault SAS for Belgium and director of a dozen of the Arnault Group subsidiaries. In recent years this related party agreement for consulting services was not even mentioned in the special report of related party transactions signed by reputable firms Ernst & Young and Mazars, a clear breach with the article L 225-38 of the French Code of Commerce... We therefore hereby congratulate Eric Guerlain Chairman of the Nomination and Remuneration and Audit Committee for his excellent compliance job!

Also in accordance with the AFEP / MEDEF code which the company explicitly refers to, the compensations due and allocated for the year ended April 30, 2013 to the Chairman and to the CEO is proposed for a non-binding vote. 

To make its recommendation, Proxinvest studied 52 points of control in four areas: Transparency, Quantum & Structure, Alignment with Performance and Dynamics. 

This first experience of "Say on Pay" should have prompted the company to a better disclosure about the remunerations paid to holding companies of the Bernard Arnault Group... The main factor for a “NO” vote is that the total amount received by Bernard Arnault taking into account its € 8 million compensation through holding companies reached a remuneration of € 11,414,039 ... far beyond the socially acceptable maximum defined by Proxinvest 240 SMIC, while the amount of the commitment made by LVMH for his complementary pension on April 30, 2013 was of € 15.7 million!

The young CEO Sydney Toledano total compensation of € 1.8 million is much lower, but the quantitative criteria of the bonuses are not verifiable and account for only one third while another third is based on the achievement of untraceable qualitative objectives. Finally, Sidney Toledano has a non-compete clause of 24 months of gross salary in case of termination and, in the case of grants of shares, his final allocation is based on a positive trend at only one of the four criteria of your choice (current operating income, net cash from operating activities and operating investments, current operating margin Group)...

An easy luxury life…

Paris, 21 October, 2013