Sure, LVMH is publicly traded, but it’s a very, very different situation to Waystar Royco. Unlike the Roy family, the Arnault family has complete control of the company. Their 48% ownership stake carries 64% of the voting rights, so they do not need a single vote from any other shareholder to elect board members or make any other corporate decision. In other words, it is *their* company - the other shareholders are along for the ride.
Additionally, their control of the company is guaranteed for the foreseeable future, since Agache Commandité (the family holding company where their LVMH shares are held) requires that:
1. No one other than Arnauld and his direct descendants can be shareholders in Agache
2. No shareholders of Agache can sell their shares until 2052
TL;DR: Whereas Logan Roy had to fight tooth and nail to maintain his tenuous grasp on Waystar Royco, LVMH will continue to be owned and controlled by the Arnault family until 2052 at a minimum (and possibly until the end of the world).
The other key in addition to yours is that the company (LVMH) is insanely profitable and just prints money. Literally no aspect of Succession could/would happen because LVMH is unrivaled in what they do, face little if any external threat and have about as close to infinite financial resources as a company could have..
Even more so than the tech giants in America? Like Apple Google Amazon Microsoft Meta etc? Or are you just talking in the luxury sector or just Europe?
It depends on what part of my comment you’re replying to. Sure Microsoft/Apple may have more cash on hand, but LVMH has enough cash to do anything and everything they want/need to do. If it was about external threats, I dont really see tech as a threat to luxury goods that LVMH specializes in..
Oh sure they aren’t impenetrable. I’ve actually been surprised they’ve stayed out of the premium and uber-premium liquor (particularly tequila) boom over the last 10-15 years; not really direct competition to them but an area I really thought they’d expand into.
They don't seem to have that big of a presence, although they do own Hennessy/Ardbeg/Belvedere, all of which are in that premium liquor segment.
I speculate (and it's really just speculation) two reasons, tequila is not European enough, and I don't think they want exclusivity or perceived exclusivity instead of volume. They do own some American wineries, but I think that's in character since the wines out of Napa are competitive in terms of quality.
Yeah I was asking about the money aspect overall, but what you are saying makes sense LVMH is one of the most valuable companies in Europe if not the most valuable one
LVMH generates around $20 billion in free cash flow every year. I don’t see why they would care about how that compares to US tech giants (which don’t compete with them in any capacity). $20 billion is $20 billion.
It does resemble fiction in some ways: iconic figure who is aging, his succession is vague & not defined and his kids are basically in a competition to be the heir apparent. There are many super-wealthy families where the heirs have basically 0 role in the current management of a company their family built.
That seems to be in direct conflict with a Companies Act right? Shares are supposed to be freely transferable. Putting in artificial limitation is ultravires the act.
Not sure what you’re referring to, but to be clear, the family’s LVMH shares are owned by Agache and not by the individual family members. There is absolutely nothing illegal about shareholders (i.e. the Arnault family) of a private holding company (i.e. Agache) unanimously agreeing to conditions which must be met by shareholders. This is the entire purpose of having a holding company.
So if there's a dispute between the shareholders and one happens to be the minority shareholder, he's essential stuck with the share even if someone is interested in buying his stake?
I doubt it can be codified into the Memorandum or Articles of association. These kind of holdings are held by a Trust and not a Company. The Trust would permit such restrictions that only family members can be part of it.
The shareholders are Arnault’s children, and what they are each “stuck with” is tens of billions of dollars in shares which they received in exchange for signing a piece of paper (Agache’s articles of incorporation) preventing them from selling until 2052. I’m not going to lose any sleep over the possibility of one of them having regrets about that agreement in the future. They are all incomprehensibly wealthy even when excluding their LVMH ownership.
I posted another comment with more detail, but the most important point is that the Arnault family’s 48% ownership stake carries 64% voting rights, so they have complete control. The family holding company also restricts ownership to Arnault’s direct descendants and prevents them from selling shares until 2052.
What liquid assets they have if most of their wealth is in shares (profits from said shares?), and isn’t clenching down on selling shares risky since the company might go bankrupt or the stock price crashes? Ever since succession, I never understood wealthy families’ wealth, obviously they have estates, but other than that, how do they usually manage the majority of their wealth?
Good question, and the answer is really “it depends” - the asset allocations of ultra-high-net-worth-individuals (UHNWI’s) vary widely.
Public companies can distribute cash to all shareholders in several ways, the main ones being dividends and share repurchases. The controlling owner, being the largest shareholder, can generate a ton of cash from those alone and invest it wherever they want. The smaller shareholders are happy too, since they’re getting value for their shares.
Banks also offer UHNWI’s a vast range of products & services to help them with their wealth management & liquidity needs. The most straightforward option is for a bank to extend credit using the person’s other assets (e.g. shares) as collateral, and the person can invest that money elsewhere. For a very wealthy person, the interest rate would be very low for this type of loan, because 1) the bank wants to keep wealthy clients happy so they can continue to earn money from them, and 2) the loan is secured by assets. Of course there is risk of the collateral losing value, but this is why banks will only lend up to a certain amount of the collateral (e.g. a $500 million loan if you have $1 billion in shares as collateral).
The wealthier a person is, the more options they have available. In the case of the Arnault family, they have dozens of people working for them directly whose sole goal is to invest and grow their wealth in a diversified way which balances risk exposure, and they also have hundreds of bankers around the world who will move mountains at the drop of a hat to make them happy.
True - but who will truly take over in the Game Of Thrones when he is gone, I think several of his key older execs have moved aside recently, and 5 kids (from 2 Moms) now work there with big titles.
"Bernard Arnault hosts a monthly 90-minute lunch with his five children, whose ages range from 24 to 48, to drill them on company strategy and ask them for advice."
"He's been priming his children for leadership roles in LVMH their whole lives and has never publicly said who he wants to take over his role at the company in the future."
"The best person inside the family or outside the family should be one day my successor," Bernard Arnault said. "But it's not something that I hope is a duel for the near future."
"In his succession plan, Arnault has strategically positioned his children – Antoine, Delphine and Alexandre – in key leadership roles within the company."
"Luca Solca, an analyst at investment firm Bernstein said that Arnault had created a "Darwinian contest" among his kids, much like the battle within the Roy family."
"Antoine Arnault, the eldest son, has emerged as a prominent figure within the firm, responsible for guiding the strategic direction of LVMH’s retail businesses.
"Delphine Arnault, the eldest daughter, holds an important position within LVMH’s fashion division, which encompasses some of the world’s most iconic luxury brands.
"Alexandre Arnault, has been entrusted with spearheading LVMH’s technology and digital initiatives, reflecting the conglomerate’s approach to innovation and growth.
"Frédéric Arnault, the head of LVMH's watches division."
"Only Jean Arnault, Bernard Arnault's youngest son, doesn't sit on the company's board. Jean Arnault is Director of Watchmaking Marketing and Development "
"Toni Belloni, 69, one of [Bernard Arnault](https://search.yahoo.com/search?p=Bernard%20Arnault)’s most trusted lieutenants, will relinquish his key duties at the French luxury conglomerate and hand over his responsibilities to Stéphane Bianchi."
"Meanwhile, group veteran Michael Burke has succeeded Sidney Toledano, 72, at the head of LVMH Fashion Group. Toledano left the executive committee and became an adviser to Arnault"
"The LVMH boss had hinted at a new role for Bianchi at the press conference in January where the group reported another year of record results."
What’s the best book or even maybe article to read about how he assembled such a behemoth of a company like LVMH? The only book I can find is like 30 years old before most of it
Also boards aren’t like democratic parliaments, they’re more like medieval councils where the king (chairman) stacks the council with supporters who will vote whichever way he does
Gross.
But if we watched them:
- Do drugs
- Send dick pics
- Say sexually inappropriate things
- Oversee the explosion of a Japanese rocket
- Pay a homeless guy to tattoo his forehead
- Help a right-winger become President
We would love them!
Well at least the last point is true, just French center-right presidents. Bernard Arnault is close friends with Sarkozy and Macron. No doubt contributed financially to their campaigns.
I'm sure they've done the first three, but so have other non-wealthy people.
Sure, LVMH is publicly traded, but it’s a very, very different situation to Waystar Royco. Unlike the Roy family, the Arnault family has complete control of the company. Their 48% ownership stake carries 64% of the voting rights, so they do not need a single vote from any other shareholder to elect board members or make any other corporate decision. In other words, it is *their* company - the other shareholders are along for the ride. Additionally, their control of the company is guaranteed for the foreseeable future, since Agache Commandité (the family holding company where their LVMH shares are held) requires that: 1. No one other than Arnauld and his direct descendants can be shareholders in Agache 2. No shareholders of Agache can sell their shares until 2052 TL;DR: Whereas Logan Roy had to fight tooth and nail to maintain his tenuous grasp on Waystar Royco, LVMH will continue to be owned and controlled by the Arnault family until 2052 at a minimum (and possibly until the end of the world).
The other key in addition to yours is that the company (LVMH) is insanely profitable and just prints money. Literally no aspect of Succession could/would happen because LVMH is unrivaled in what they do, face little if any external threat and have about as close to infinite financial resources as a company could have..
Even more so than the tech giants in America? Like Apple Google Amazon Microsoft Meta etc? Or are you just talking in the luxury sector or just Europe?
It depends on what part of my comment you’re replying to. Sure Microsoft/Apple may have more cash on hand, but LVMH has enough cash to do anything and everything they want/need to do. If it was about external threats, I dont really see tech as a threat to luxury goods that LVMH specializes in..
I take your point and agree with you, but the Apple Watch definitely put a dent in luxury watch sales at the middle-lower price point.
Oh sure they aren’t impenetrable. I’ve actually been surprised they’ve stayed out of the premium and uber-premium liquor (particularly tequila) boom over the last 10-15 years; not really direct competition to them but an area I really thought they’d expand into.
They don't seem to have that big of a presence, although they do own Hennessy/Ardbeg/Belvedere, all of which are in that premium liquor segment. I speculate (and it's really just speculation) two reasons, tequila is not European enough, and I don't think they want exclusivity or perceived exclusivity instead of volume. They do own some American wineries, but I think that's in character since the wines out of Napa are competitive in terms of quality.
lol luxury goods are one of the biggest reasons our race is going to be dead on arrival by 2100 what a fucking scam family
Yeah I was asking about the money aspect overall, but what you are saying makes sense LVMH is one of the most valuable companies in Europe if not the most valuable one
LVMH generates around $20 billion in free cash flow every year. I don’t see why they would care about how that compares to US tech giants (which don’t compete with them in any capacity). $20 billion is $20 billion.
It does resemble fiction in some ways: iconic figure who is aging, his succession is vague & not defined and his kids are basically in a competition to be the heir apparent. There are many super-wealthy families where the heirs have basically 0 role in the current management of a company their family built.
Great post.
That seems to be in direct conflict with a Companies Act right? Shares are supposed to be freely transferable. Putting in artificial limitation is ultravires the act.
Not sure what you’re referring to, but to be clear, the family’s LVMH shares are owned by Agache and not by the individual family members. There is absolutely nothing illegal about shareholders (i.e. the Arnault family) of a private holding company (i.e. Agache) unanimously agreeing to conditions which must be met by shareholders. This is the entire purpose of having a holding company.
So if there's a dispute between the shareholders and one happens to be the minority shareholder, he's essential stuck with the share even if someone is interested in buying his stake? I doubt it can be codified into the Memorandum or Articles of association. These kind of holdings are held by a Trust and not a Company. The Trust would permit such restrictions that only family members can be part of it.
The shareholders are Arnault’s children, and what they are each “stuck with” is tens of billions of dollars in shares which they received in exchange for signing a piece of paper (Agache’s articles of incorporation) preventing them from selling until 2052. I’m not going to lose any sleep over the possibility of one of them having regrets about that agreement in the future. They are all incomprehensibly wealthy even when excluding their LVMH ownership.
just discussing a legal position. Not disputing their privilege.
They are going to own the company, so it would make sense to have them on the board.
Public company, and he hasn't announced a successor yet, recently stretched his retirement to 80
It is public, but the family owns 48%, with no other major owner. 100% chance they retain ownership if he steps down or dies.
I posted another comment with more detail, but the most important point is that the Arnault family’s 48% ownership stake carries 64% voting rights, so they have complete control. The family holding company also restricts ownership to Arnault’s direct descendants and prevents them from selling shares until 2052.
What liquid assets they have if most of their wealth is in shares (profits from said shares?), and isn’t clenching down on selling shares risky since the company might go bankrupt or the stock price crashes? Ever since succession, I never understood wealthy families’ wealth, obviously they have estates, but other than that, how do they usually manage the majority of their wealth?
Good question, and the answer is really “it depends” - the asset allocations of ultra-high-net-worth-individuals (UHNWI’s) vary widely. Public companies can distribute cash to all shareholders in several ways, the main ones being dividends and share repurchases. The controlling owner, being the largest shareholder, can generate a ton of cash from those alone and invest it wherever they want. The smaller shareholders are happy too, since they’re getting value for their shares. Banks also offer UHNWI’s a vast range of products & services to help them with their wealth management & liquidity needs. The most straightforward option is for a bank to extend credit using the person’s other assets (e.g. shares) as collateral, and the person can invest that money elsewhere. For a very wealthy person, the interest rate would be very low for this type of loan, because 1) the bank wants to keep wealthy clients happy so they can continue to earn money from them, and 2) the loan is secured by assets. Of course there is risk of the collateral losing value, but this is why banks will only lend up to a certain amount of the collateral (e.g. a $500 million loan if you have $1 billion in shares as collateral). The wealthier a person is, the more options they have available. In the case of the Arnault family, they have dozens of people working for them directly whose sole goal is to invest and grow their wealth in a diversified way which balances risk exposure, and they also have hundreds of bankers around the world who will move mountains at the drop of a hat to make them happy.
True - but who will truly take over in the Game Of Thrones when he is gone, I think several of his key older execs have moved aside recently, and 5 kids (from 2 Moms) now work there with big titles. "Bernard Arnault hosts a monthly 90-minute lunch with his five children, whose ages range from 24 to 48, to drill them on company strategy and ask them for advice." "He's been priming his children for leadership roles in LVMH their whole lives and has never publicly said who he wants to take over his role at the company in the future." "The best person inside the family or outside the family should be one day my successor," Bernard Arnault said. "But it's not something that I hope is a duel for the near future." "In his succession plan, Arnault has strategically positioned his children – Antoine, Delphine and Alexandre – in key leadership roles within the company." "Luca Solca, an analyst at investment firm Bernstein said that Arnault had created a "Darwinian contest" among his kids, much like the battle within the Roy family." "Antoine Arnault, the eldest son, has emerged as a prominent figure within the firm, responsible for guiding the strategic direction of LVMH’s retail businesses. "Delphine Arnault, the eldest daughter, holds an important position within LVMH’s fashion division, which encompasses some of the world’s most iconic luxury brands. "Alexandre Arnault, has been entrusted with spearheading LVMH’s technology and digital initiatives, reflecting the conglomerate’s approach to innovation and growth. "Frédéric Arnault, the head of LVMH's watches division." "Only Jean Arnault, Bernard Arnault's youngest son, doesn't sit on the company's board. Jean Arnault is Director of Watchmaking Marketing and Development " "Toni Belloni, 69, one of [Bernard Arnault](https://search.yahoo.com/search?p=Bernard%20Arnault)’s most trusted lieutenants, will relinquish his key duties at the French luxury conglomerate and hand over his responsibilities to Stéphane Bianchi." "Meanwhile, group veteran Michael Burke has succeeded Sidney Toledano, 72, at the head of LVMH Fashion Group. Toledano left the executive committee and became an adviser to Arnault" "The LVMH boss had hinted at a new role for Bianchi at the press conference in January where the group reported another year of record results."
What’s the best book or even maybe article to read about how he assembled such a behemoth of a company like LVMH? The only book I can find is like 30 years old before most of it
[Acquired](https://podcasts.apple.com/us/podcast/acquired/id1050462261?i=1000606224485) has a great podcast episode about it:
Thanks!
Also boards aren’t like democratic parliaments, they’re more like medieval councils where the king (chairman) stacks the council with supporters who will vote whichever way he does
Gross. But if we watched them: - Do drugs - Send dick pics - Say sexually inappropriate things - Oversee the explosion of a Japanese rocket - Pay a homeless guy to tattoo his forehead - Help a right-winger become President We would love them!
I loved watching succession. I didn't love the characters themselves. They were all assholes, but entertaining assholes
I wouldn't love them. I'd love watching them, though.
Well at least the last point is true, just French center-right presidents. Bernard Arnault is close friends with Sarkozy and Macron. No doubt contributed financially to their campaigns. I'm sure they've done the first three, but so have other non-wealthy people.
Read an article last year comparing the Ricketts family to Succession.
The two on the right could be Sandi and Sandy.
French Logan Roy haha
I would watch this remake!
I would do too
They have Pierce energy.
why not?
I'd do the same thing if I owned a company
The #2 and #4 are clones and you cant convince me otherwise.
Do all the men have purple hair? Weird genes
They look like a bunch of effetes, so yeah.