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The CEO of Kering, François-Henri Pinault, has just announced in a press release published on Friday 10 April that he has decided to reduce his fixed salary by 25%. For its part, Forbes, which published a ranking of the world’s largest fortunes on 7 April, revealed that Bernard Arnault, the world’s third largest fortune and CEO of LVMH, had lost a total of 14 billion euros on the stock markets. Analysis.
High net worth individuals, whose capital is invested on the equity markets and particularly in the companies they manage or in which they are the main shareholders, are strongly impacted by the current recession estimated for 2020 at 6% of GDP by Bruno Le Maire, Minister of the Economy.
This is the case of the two luxury industry leaders and their groups, who are facing a double penalty.
From the end of January to the end of March, LVMH’s shares in fact rose from 87 dollars to 74 dollars according to a report by the Hurun Research Institute.
As a result, the fortune of Frenchman Bernard Arnault, CEO of LVMH, rose from 91.7 billion euros to 76 billion dollars, according to the 34th edition of the annual ranking of billionaires in the world, which Forbes has just unveiled.
The ranking shows that due to the deterioration of the economy, “many billionaires are worth a few hundred million dollars less”, that some “have disappeared from the list” and that there are “fewer billionaires today than a year ago”.
For his part, Kering has just published a press release in which he announced that his CEO François-Henri Pinault, whose fortune is estimated at 6.8 billion euros, had decided to reduce his fixed salary by 25% from 1 April until the end of the year.
The luxury group specifies that he and its Deputy CEO, Jean-François-Palus, have waived their entire annual variable remuneration for 2020.
On the occasion of the publication of its annual results for 2019 on 28 March, LVMH had announced that it was not yet able to quantify the overall consequences of the pandemic on the houses it owns. However, the press release stated that if the consolidated sales figure is not known today, “it can reasonably be assumed that it will fall within a range of 10 to 20% compared to last year”. The group will take stock of the situation on 16 April.
As for Kering, on 20 March, it was forecasting a 15% drop in its turnover in the first quarter of 2020, a very strong impact on its second quarter turnover and a sharp decline in its current operating margin for the first half of the year.
This situation did not prevent the luxury giants from mobilizing in the fight against Covid-19. In particular, LVMH converted its French and Italian perfume production units (Christian Dior, Guerlain and Givenchy, Bulgari) to produce hydroalcoholic gel for hospitals and had masks manufactured in Louis Vuitton’s workshops. Kering had three million surgical masks shipped from China to the French health services and made an exceptional financial donation to the Pasteur Institute to support coronavirus research. The French workshops of Balenciaga and Saint Laurent are also preparing to manufacture masks.
Headline photo: François-Henri Pinault, Bernard Arnault © Wikipedia[/vc_column_text][/vc_column][/vc_row]
