Bayer in damage control mode after court verdicts
Bayer's top executives have mounted a campaign to reassure its staff and shareholders that the company can contain fallout over its newly acquired weedkiller Roundup, as a public reckoning before investors looms at the end of the month.
CEO Werner Baumann held a conference call with employees around the world on Monday, assuring them that the 155-year-old German company will weather the challenge despite its second loss in US courts, according to sources. They added that pharmaceuticals chief Stefan Oelrich held a similar meeting on Tuesday focusing on strategic priorities. Other divisional managers also conducted briefings.
The internal damage-control initiative comes as Baumann prepares to face questions at Bayer's annual shareholders' meeting on April 26 from investors angry at how the company's fortunes have faltered since it completed the $63bn (€56bn) acquisition of Roundup owner Monsanto last June. The shares have dropped about 40pc since then, wiping out more than €35bn in market value.
A Bayer representative declined to comment on internal communication. The company has repeatedly said it will defend Roundup vigorously and that scientific studies have shown its key ingredient, a chemical called glyphosate, to be safe. More than 11,200 lawsuits in the US are linking the herbicide to cancer.
German shareholder gatherings are popular and occasionally fractious affairs: thousands of investors plunder the buffet, and CEOs are grilled on minute details of the company's performance for the better part of a day.
In one sign of shareholder protest at Bayer, corporate governance expert Christian Strenger, a former CEO of DWS Investments, has filed a motion proposing that management board members not be discharged of responsibility for their actions last year. Should it pass, it would have few practical ramifications but would be a harsh rebuke for Baumann and other managers.
Bayer's supervisory board has backed the CEO, writing in a response on Monday that he and other top managers "discussed the opportunities and risks of the acquisition very extensively and in numerous meetings and carefully weighed them against each other" before agreeing to buy Monsanto in September 2016.
At that time, there were about 120 pending lawsuits over glyphosate, Roundup's main ingredient, Bayer said. That number has multiplied, and the company last month lost its second lawsuit over claims the weedkiller causes cancer. In that case, a jury in San Francisco federal court awarded compensatory damages of $5.3m and punitive damages of $75m to a 70-year-old man who became ill after spraying the herbicide on his property for decades. The verdict followed a similar decision by a state court jury last summer.