Swatch Group is facing a rare moment of shareholder activism as Steven Wood, founder of New York-based activist hedge fund GreenWood Investors, makes a bold bid to secure a seat on the Swiss watchmaker’s board at its annual general meeting on Wednesday, according to a report by Reuters.
Wood, whose firm holds a modest 0.5% stake in Swatch, is seeking to represent the largely sidelined bearer shareholders – who own a majority of the capital but lack proportional voting power – in a move aimed at shaking up the company’s lagging performance and rigid governance.
Central to Wood’s push is a call for Swatch to focus more aggressively on its high-end luxury marques, including Breguet and Blancpain, to revitalise growth and improve margins. But his proposal is up against the entrenched power of the Hayek family, which holds approximately 44% of voting rights and has long exercised tight control over Swatch’s strategic direction.
The company’s supervisory board has recommended shareholders reject Wood’s nomination, and analysts say the odds are stacked against the activist. “The chances are very slim,” said Jean-Philippe Bertschy, head of Swiss equity research at Vontobel. “But the move does signal a new level of shareholder dissatisfaction.”
That sentiment has been echoed by leading proxy advisors Institutional Shareholder Services (ISS) and Glass Lewis, which have advised voting against the re-election of Swatch’s supervisory board over concerns about its independence — a signal of growing scrutiny over the group’s insular governance model.
Swatch, still led by CEO Nick Hayek and chaired by his sister Nayla — both children of late founder Nicolas Hayek — has seen a sharp decline in performance. Its 2024 profits plunged 75% year-over-year to CHF219 million, while its share price has fallen from CHF600 in 2013 to under CHF150 today. In contrast, rival Richemont has managed modest gains and remains a market favourite.
Compounding Swatch’s challenges are sluggish sales in China, which dented overall revenues by nearly 15% last year. The company is now the most shorted stock on the Euro STOXX 600 index, per LSEG data.
Despite the near-term likelihood of the Hayeks prevailing, analysts suggest the tide may be slowly turning. “There’s mounting pressure,” Bertschy noted. “Even if Wood fails, this could be the beginning of broader calls for governance reform.”
