Bayer has mounted a campaign to reassure staff and shareholders that it can contain fallout over its newly acquired weedkiller Roundup, even as an advisory group urged investors to protest against management's actions and pay.
CEO Werner Baumann held a conference call with employees around the world this week, assuring them that the 155-year-old German company will weather the challenge despite a second loss in US courts, according to people familiar with the situation.
Investor trust in Baumann is slipping, with proxy adviser Glass Lewis & Co questioning his bonus and urging a vote of no confidence in him and other executives at Bayer's annual meeting this month.
Pharmaceuticals chief Stefan Oelrich held a similar conference call focusing on strategic priorities, said the people, who asked not to be identified because the calls were private.
Other divisional managers also conducted briefings, according to one person.
The internal damage-control initiative comes as Baumann prepares for the April 26 meeting of shareholders angry at how the company's fortunes have faltered since it completed the $63bn (R889bn) acquisition of Roundup owner Monsanto in June last year. The shares have dropped about 40% since then, wiping out more than €35bn (R554bn) in market value.
A Bayer representative declined to comment on internal communication. The company has repeatedly said it will defend Roundup vigorously and that scientific studies have shown its key ingredient, a chemical called glyphosate, to be safe. More than 11,200 lawsuits in the US seek to link the herbicide to cancer.
German shareholder gatherings are popular and occasionally fractious affairs: thousands of investors plunder the buffet, and CEOs are grilled on minute details for the better part of a day.
In one sign of shareholder protest at Bayer, corporate governance expert Christian Strenger, a former CEO of DWS Investments, has filed a motion proposing that management board members should not be discharged of responsibility for their actions last year. Should it pass, it would have few practical ramifications but would be a harsh rebuke for Baumann and other managers.
Bayer's supervisory board has backed the CEO, writing this weekthat he and other top managers "discussed the opportunities and risks of the acquisition very extensively and in numerous meetings and carefully weighed them" before agreeing in September 2016 to buy Monsanto.
Nonetheless, there's potential for the glyphosate cases to further erode value for shareholders, Glass Lewis said.
The advisory firm counselled shareholders not to ratify Baumann's actions. Glass Lewis criticised the supervisory board for not seeking a more independent audit committee and for boosting Baumann's cash bonus by 28%, to €1.7m, for 2018.
"A limited reduction, rather than increase, in the CEO's cash bonus would have represented a positive signal to shareholders," said Glass Lewis.
A Bayer representative declined to comment on the Glass Lewis recommendations.
Bayer supervisory board chair Werner Wenning, who has been close to the CEO for decades, was also one of the main architects of the Monsanto deal.
Bloomberg..