PARIS (Reuters) - The boss of drugmaker Sanofi Chris Viehbacher could not say on Tuesday if he had the support of his board and confirmed to Reuters that his chairman declined to clarify his future during a meeting the previous day.
When Chief Executive Viehbacher asked about his position at the helm of France’s second-biggest listed company, Chairman Serge Weinberg curtly dismissed the subject, saying it was “not on the agenda,” according to several sources close to Sanofi board members who spoke of an increasingly frosty relationship between the two men.
Viehbacher confirmed Weinberg’s words to Reuters in a telephone interview.
The CEO has transformed a very French drug company by making it much more international in outlook, winning the praise of many analysts and investors, but raising some hackles in Paris.
Sanofi’s shares fell more than 10 percent on Tuesday, their biggest drop in 17 years, after the company warned its key diabetes business would probably not grow next year and as uncertainty over Viehbacher’s role - which first surfaced on Monday - rattled investors.
“My job is to run the company and I think I’ve done a good job with that for six years, that’s what I’m focused on. After that it’s up to the board... But there’s a difference between board members and the board,” Viehbacher said in the interview.
Sanofi’s first non-French boss, Viehbacher took his job in late 2008. Dubbed “smiling killer” by trade unionists, he overhauled and internationalized the company and brought a straight-talking, sometimes brusque Anglo-Saxon management style that has won over investors but ruffled feathers with trade unions and members of the government.
But over the past months, he has been directly butting heads with some board members.
Les Echos newspaper this week published a letter from Viehbacher to the board, dated Sept. 4 and revealing his mistrust of Weinberg, chairman since 2010.
“It has come to my attention, first through rumor, that the Chairman of the Board is actively seeking a successor to me as Chief Executive Officer,” read the letter, in which Viehbacher urged the board to clarify his situation as soon as possible.
One source said Viehbacher was upset he wasn’t getting any answers and told the board he would be getting himself a lawyer.
Viehbacher declined to say what he planned to do. Nobody picked up the phone at Weinberg’s Paris-based Weinberg Capital Partners, and the investment firm did not immediately respond to emailed requests for contact with Weinberg.
The fact that Viehbacher moved to Boston in June did not help relations improve, but his change of residence was not the root of the dispute, which chiefly has to do with the way he communicates with the board, the sources said.
“This is a board that is not happy with the way it is being treated by its chief executive,” one of the sources said.
“He’s very authoritarian, solitary, secret. He does not sufficiently inform the board of the decisions he’s taking... Today the board is fed up.”
Earlier this year, Viehbacher reviewed ways to cut its exposure to an $8 billion portfolio of off-patent drugs in Europe, the bulk of which are produced in France.
Viehbacher oversaw the review without informing board members, until the options studied - which concern six sites and would affect 2,600 staff - leaked to the press in June.
In France, a nation whose double-digit unemployment and waning industrial footprint is a growing headache from one government to the next, the move lacked tact and likely hurt some sensibilities, one of the sources said.
Viehbacher, who had previously emphasized that “everyone in the industry” was looking at what to do with mature drugs, appeared much more cautious about the topic on Tuesday. He said while various options had been reviewed, “there is no major plan to do anything in France or anywhere else on these products.”
“The governance rules are that you go to the board if you’re going to do a change a strategy or if you’re going to do a major transaction,” Viehbacher told Reuters.
“But the company has to be able to think about things and see if there’s anything that’s doable. And the reality is that we’ve found nothing, there is no project,” he stressed.
Viehbacher defended his track record as Sanofi’s boss, noted that the board had recommended to renew his mandate back in May and said he did not understand the sudden change of wind.
“I’ve run the company six years. Most of those board members have been on board for those six years. The board has supported every major decision I’ve taken,” he stressed.
Additional reporting by Andrew Callus; editing by Andrew Callus and Susan Thomas