EssilorLuxottica says Essilor CEO to retire; halts dividend on AGM delay

EssilorLuxottica is suspending its dividend due to the coronavirus pandemic, it said Monday, adding its annual shareholder meeting has been delayed and its Essilor chief executive officer, Laurent Vacherot, is to retire.

Companies in France and elsewhere have come under pressure from unions and governments to forego shareholder payouts to save up cash to weather the crisis, particularly when they are considering taking some form of state aid.

EssilorLuxottica last week scrapped its financial guidance and warned of a hit to second-quarter profit due to the outbreak, adding it was putting some investments on hold as it halted production at selected sites.

The eyewear company, formed in 2018 as a merger between French lens manufacturer Essilor and Italian spectacles maker Luxottica, also said on Monday that Laurent Vacherot, Chief Executive of Essilor, was retiring.

Paul du Saillant, who was deputy CEO, will replace Vacherot as a director on the company’s board and also become Essilor CEO with immediate effect, EssilorLuxottica said.

Essilor and Luxottica’s merger was plagued from the start by rows over who should run the business. These culminated last year when Luxottica’s founder and largest shareholder of the new entity, Leonardo Del Vecchio, began an arbitration process.

This was soon abandoned, with the parties pledging to find a new chief executive by the end of 2020 at the latest.

Du Saillant will be given the same as mission as Vacherot had to pursue the integration of the two companies alongside Francesco Milleri, CEO of Luxottica, within the structure headed up by Del Vecchio, executive chairman, and Hubert Sagnieres, executive vice chairman.

EssilorLuxottica, which also owns brands like Oliver Peoples and Oakley, said its annual meeting would take place without any public on June 25 instead of May 15, mirroring other companies in putting off AGMs amid a broad coronavirus lockdown.

Earlier this month, the company had said the board would propose a dividend of 2.23 euros ($2.46) per share.

“The board decided to re-evaluate its previous decision on dividend distribution at a later date. At such later date, the board may decide whether to confirm, reduce or cancel dividends based on the evolution of the situation,” it said.