Stock Options as Majority Shareholder Self-Enrichment

"After a gradual increase in power, according to our information, he would have taken nearly 90% of the stock options distributed by LVMH in 1994 for himself. That's 500,000 shares at the time, which have become 3 million shares today9. This represents a gain of 1.5 billion francs in 1994, which would have been renewed in the following years, but for smaller amounts."

"has a controlling shareholder, benefiting from a significant fraction of the capital and absolute decision-making power, ever increased their own stake at the expense of other shareholders through stock options? Because that's what it's about. In the normal framework of stock option allocation, shareholders agree to give up part of their wealth for the benefit of executives, betting that their greater motivation will enrich everyone more. But in Arnault's scheme, there can be no additional motivation. The granting of stock options thus boils down to the legal enrichment of the majority shareholder at the expense of minority shareholders."

"This is precisely the problem. Because stock options, in principle, were invented–and fiscally supported–to involve salaried executives in the capital of their company and thus make them interested in its smooth operation. By extension, they allow salaried CEOs to gradually acquire part of the capital of the company they lead. This was the case with Claude Bébéar at AXA, who received more than 1 billion francs in stock options in 1994, almost single-handedly. However, to his credit, Bébéar had created AXA himself, turning it into one of the largest companies in the world by aggregating various companies without worrying, like Arnault, about being the controlling shareholder."