Swatch Investor has the family target behind Omega and Longines

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Swatch group investor Steven Wood said that the Swiss watchmaker “is only aimed at a shareholder”, as he increases his campaign to be elected to the family controlled company council.

Wood, founder and investment director of Greenwood Investors, based in New York, said in an interview with The Financial Times that the group behind Omega, Harry Winston and Breguet is in “a situation in which the rights of minority shareholders are ignored.”

The comments are a poorly veiled critique of the Hayek family, which has 25 percent of Swatch’s actions, but control 44 percent of the voting rights. Nicolas Hayek, founder of Nick Hayek JR, son of the Swatch, has been the CEO since 2003. Her sister Nayla has been chaired by the council since 2010.

Greenwood, who owns 0.5 percent in the company worth a SWF37MN, has submitted a resolution for Wood to be elected on Swatch Council at the company’s annual general meeting on May 21.

The Hayek family is under pressure after years of low performance, which has been promoted to Nick Hayek, the CEO, repeatedly raised the possibility of taking the private company. Swatch registered a 75 percent fall of net profit at last year’s SWF219MN.

“The undervaluing is the opening of the eyes. Swatch sells about half of its accounting value,” said Wood, who added that he had participated with the council since June. “This is a life opportunity in luxury space,” he said.

The Wood campaign is a rare example of shareholders’ activism in Switzerland, where many companies are controlled by powerful families.

Swatch has a double class sharing structure. The Hayek family is their own in mainly registered shares, which carry larger voting rights than carrier actions, many of which are detained by institutional investors. Wood wants to serve as a representative for carrier shares, representing 55 percent of Swatch’s social capital.

Wood describes himself as a “constructivist” instead of an activist. He wants Swatch to communicate more openly with investors, an approach he has also pursued the Aerospace and Defense Group of the Italian List Leonardo, where he has been serving since 2023.

Many of Wood’s ideas are aligned with analysts and shareholders, according to Jean-Philippe Berttschy, head of Swiss Capital Research in Vontobel.

“All investors agree with what he says. It’s good to have a healthy pressure on the Hayek family,” he said.

The Swatch Council has recommended the shareholders voting against Wood resolution for several reasons, including that it is not Swiss and does not live in the country. The company said that Jean-Pierre Roth, a former President of the Swiss National Bank who has been in the Swatch Board since 2010, is the designated representative of Swatch shareholders.

The Swiss Proxy Foundation Ethos Foundation, which represents Swiss pension funds and has previously expressed concern about Swatch’s corporate government, has recommended voting in favor of the Wood election.

However, another representation agency, ISS, advised shareholders to vote against the Wood election because he had not exposed a convincing case. ISS also advised investors to vote against the re -election of the majority of Swatch Council directors, as the company has not been able to establish a sufficiently independent advice.

Swatch has not given his shareholders the shareholders of the opportunity to choose his representative of the Council, without the entry of registered shareholders. This is a violation of your rights under Swiss law, according to Wood.

Swatch said it would guarantee that the proposal was “legally correct” to the AGM and that it has acted in full compliance with all national laws and regulations.

Wood said that Orbis Investment Management, which has a 1 % participation in Swatch, had supported him.

But if the Hayek family manages to block Wood’s designation in the Council this month, it will consider finding the necessary support of five percent of shareholders to be able to call an extraordinary general meeting.

He would use it to apply for a separate vote, only among the shareholders of Swatch carriers, to be elected as a council’s representative.

“There are many different paths that could be done,” he said. “May 21 is not the end of history.”