Tensions Mount Among Vivendi Top Brass

15 April 2002

All is not well amid the senior ranks of Vivendi Universal, as reports suggest confidence in the leadership of chief executive Jean-Marie Messier is weakening.

Pressure has been mounting on Messier recently as investors have seen their stakes fall in value by around 40% since the turn of the year and the media mammoth’s debt mountain climb to €19 billion ($16.7bn; £11.6bn).

The latest controversy is a €2bn executive share option scheme Messier is trying to push through against the wishes of some senior executives. The Vivendi boss told management last week to support the proposal, which will reserve 5% of the group’s equity for executive stock options. Investors will be asked to back the plan on April 24.

However, some senior staff have voiced disapproval of the scheme, which Messier considers essential to attract top talent.

“Investors bought shares at maybe €75,” one disgruntled executive commented. “Now the shares are in the €30s and executives are awarding themselves options. It would be more sensible to cancel it now, but Messier cannot hear that.”

The share option controversy is not the only cloud on Messier’s horizon, with tensions also mounting between the Vivendi supremo and management at pay-TV unit Canal Plus. On Friday, the unit’s second-in-command Denis Olivennes (once considered a potential heir to the Vivendi throne) resigned suddenly, blaming Messier’s egotistical leadership and failure to provide consistent strategy.

Relations between Canal Plus and its parent have soured since Messier publicly demanded last month that the loss-making division turn itself around within two years. The departure of Olivennes leaves the unit’s ceo Pierre Lescure in a weakened position against Messier. Said one insider: “[Lescure’s] fate is sealed.”

Data sourced from: Financial Times; The Wall Street Journal Online; additional content by WARC staff