Bayer CEO Wins Investor Backing as Roundup Talks Drag On

(Bloomberg) -- Bayer AG’s chief executive officer won a key confidence vote from shareholders, a show of support that eluded him last year and affirms his efforts to pull the company out of the Roundup crisis.

About 93% of shareholders gave their backing to Werner Baumann and other managers. The positive result is typically a foregone conclusion in corporate Germany, but the CEO lost the vote last year as shareholders revolted over the fallout of the $63 billion Monsanto takeover.

Tuesday’s vote boosts Baumann’s position at a pivotal time. With the retirement of Supervisory Board Chairman Werner Wenning -- a longtime mentor of the CEO’s who spent half a century at the company -- he’s now the main champion of a takeover that has brought plenty of headaches. Those include lawsuits from more than 50,000 plaintiffs who say Roundup caused their cancer, which Bayer denies.

Baumann insists the deal was smart, and he’ll now be counted on more than ever to bring about a fast and financially manageable closure to the crush of lawsuits in the U.S. Beyond that, Baumann will need to keep promoting a corporate strategy that puts pharmaceuticals, consumer health and crop science under one roof.

While some investors have questioned the logic of that structure, the coronavirus pandemic has underscored its benefits, Baumann said in remarks prepared for the meeting.

‘Right Businesses’

“We’re active in the right businesses,” he said. “After all, what could be more important than contributing to health and nutrition around the world?”

Shareholders also voted to clear the supervisory board at the company’s annual general meeting on Tuesday. Because of Germany’s measures to contain the coronavirus, the event took place largely online, defusing some of the theatrics of last year’s tumultuous showdown in Bonn.

While investors expressed continued frustration that Baumann has yet to resolve the lawsuits, their vote reflects a measure of patience with some of Bayer’s efforts to fix the situation, including bringing in fresh legal experts.

The shares are down more than a third since Bayer acquired Monsanto. They were little changed on Tuesday.

Bayer has appealed three lost Roundup verdicts and insists the product is safe. The company is continuing mediation talks aimed at reaching a settlement, but the pace of those talks has slowed amid the coronavirus pandemic.

Roundup Defense

Bayer has earmarked 480 million euros ($522 million) to defend itself against the Roundup allegations, the company said earlier Tuesday. That figure includes money set aside for the coming three years of expected spending on the matter.

While Bayer’s management team won decisively on the yes-or-no ballot, about 8% of potential votes abstained. That was the recommendation of shareholder advisory firm Glass Lewis. The abstention rate was slightly lower when it came to the supervisory board.

To comply with social distancing measures, shareholders submitted lists of questions in advance and Bayer’s leadership convened in a conference room at headquarters in Leverkusen, Germany. In between trips to a podium from isolated pods, an employee with gloves and a face mask scrubbed down its surface and microphone.

Bayer’s leaders still answered about 250 questions from shareholders as the event stretched on for seven hours. But many investors -- along with the company’s leadership -- expressed frustration that they couldn’t have their usual exchange of views.

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