Eramat shareholders shun CEO

Apr 27, 2007

Major stakeholders oust Jacques Bacardats from French mining company

PARIS -- The outcome of Eramet's general meeting last Monday sent shockwaves through the French mining company. Its two major shareholders, the Duval family (with a 37 percent stake) and Areva (26 percent), voted for Jacques Bacardats' control of the group to be discontinued.

The decision was taken to oust Bacardats from Eramet despite an increase in the company's share price from €38.50 in 2003 to €165 in 2007 under his leadership. The unsuspecting CEO delivered his farewell message at the meeting, explaining that the Duval family and Areva had deemed him too elderly to continue the group's development strategy.

'They consider that, at 60, I should be retiring in three to four years and thus won't be around to oversee our long-term projects, notably the expansion of our recent acquisition, Weda Bay Nickel in Indonesia,' Bacardats says.

Barely an hour later, the supervisory board had nominated Patrick Buffet as the new CEO. Only seven years Bacardats' junior, Buffet is the former general delegate of Suez's executive committee. 'The mining market is extremely active at the moment and we wanted someone younger, with more time to spend on Eramet's projects,' proffered an Areva spokesperson.

Despite this radical action, the Eramet strategy will remain unchanged. 'We had nothing against Bacardats or his company politics,' comments Georges Duval somewhat cryptically.

All too often it's impossible to dismiss CEOs, but in France shareholders are free to do so. 'It's funny that when it is the stakeholders calling the shots, everyone is surprised,' comments Fabrice Rémon of shareholder advisory group Deminor. 'In this case it was done a bit brutally, but the stakeholders were exercising their rights. Now it is up to the two major shareholders to explain to the minority stakeholders the reason for their decision.'

by Fay Sanders