It is not the first time that Bayer shareholders want to force a quick change at the top of the board. A year ago, a hedge fund pushed for the replacement of Bayer boss Werner Baumann, but failed at the annual general meeting. This year, however, the criticism is loud and comes from many quarters – not only from activist investors, but also eloquently from German funds from the savings bank and cooperative camp.
The attacks and demands show the frustration of many investors. Frustration that the Monsanto acquisition cost billions in market value. Frustration that, from their point of view, the Executive Board and Supervisory Board are not focused enough on the shareholders and strategically think too short.
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Bayer management cannot ignore this frustration. The company certainly does not need any short-cut decisions, as are now being demanded by the funds for CEO replacement and splitting up. But Bayer will soon need a clear directional decision with which the company can regain trust and create clarity on the capital market.
The demands of the funds for an immediate replacement of Baumann seems strange for several reasons. It has long been decided that Baumann will leave in spring 2024. The search for a successor has been going on for a long time.
In addition, Baumann can hardly be blamed for the current business. Bayer will probably close 2022 with a record profit of 13 billion euros, which would correspond to a record return of 26 percent. The fact that this is not rewarded on the stock market shows the loss of trust: Baumann, who was responsible for the Monsanto purchase, should finally go – combined with the hope that a successor will act more in the interests of the investors.
burden for the future CEO
That expectation is already a burden on the prospective CEO whenever he or she is deployed. The Bayer Supervisory Board should act wisely and deliberately here and must not allow itself to be driven by outsiders. It’s about finding the best solution for the succession.
And if this comes from outside the company, as required, there must be an orderly transition with the help of the acting CEO Baumann. Anything else would be wrong and harmful in view of the complex situation at Bayer, also with regard to the glyphosate lawsuits in the USA.
Only the new management board can make a directional decision about the future structure of Bayer, about spin-offs or even a split. You will certainly not do that immediately after starting. But only a clear announcement and positioning can curb the constant criticism of the capital market.
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