Current subscribers click here
To subscribe click here

Barely four years ago, Vivendi's standing with investors reached a nadir from which few companies recover. Under the leadership of Jean-Marie Messier, the once-staid water utility had overstretched itself with expensive forays into film, theme parks and mobile telephony, causing it to report a loss of E13.6 billion (then worth $11.8 billion) in March 2002, the largest in French corporate history. Vivendi Universal, as it was then known, had net debts of more than E33 billion and was fast running out of cash; Moody's Investors Service and Standard & Poor's cut its credit rating to junk status. Shortly after the board forced Messier to resign in July of that year, Vivendi's stock hit bottom at E9.30 a share, down from a peak of E81 in January 2001.

Today, it's like a new company, and the changes go far deeper than the recent shortening of the company's name to, simply, Vivendi. Immediately following Messier's ouster, new management embarked on an aggressive campaign to "win back the trust and goodwill" of shareholders, according to Jean-Bernard Lévy, who was named chief operating officer by then-CEO Jean-René Fourtou in August 2002 and took over the chief executive spot in April 2005. The company got its governance in order, slimming its bloated supervisory board from 19 members to 12 -- ten of whom are now independent -- and setting up audit, remuneration and strategy subcommittees. Vivendi also adopted strict internal controls to comply with the Sarbanes-Oxley Act -- and in stark contrast to the grousing from many European companies, Vivendi proudly vows to maintain those controls even since delisting its shares from the New York Stock Exchange last month. (The rationale: cost-cutting. Most U.S. investors hold the company's Paris-listed ordinary shares rather than its NYSE-listed American depositary receipts.)

"Yes, compliance with Sarb-Ox is arduous, it's tedious, whatever you want to call it," says the 51-year-old Lévy. "But this kind of ethical discipline is very good for a global business like ours."

Such efforts are greatly appreciated by investors. Leading European fund managers rate Vivendi as the best company in the Media sector for looking after the needs and interests of its shareholders, according to an exclusive new survey by Institutional Investor. Such a result would have been unimaginable just a few years ago, when the French company was squandering shareholder funds in its empire-building quest. The newfound credibility came in handy last month when Vivendi received a tentative takeover proposal from Norwegian investor Alexander Vik, who wants to break up the company. Vivendi rejected the overture, and shareholders seem to endorse its stance.

"Vivendi is worth more than Vik seems willing to pay," says Miguel Anjos, who helps manage about E1 billion at ESAF, the asset management division of Grupo Banco Espírito Santo in Lisbon. He credits management for sharpening the media group's focus and convincing the market that Vivendi shares don't deserve a conglomerate discount.

What History Reveals About U.S. Debt Downgrades

Sponsored by CME Group July 7, 2025

Good governance, clear communications and a focused strategy are the sine qua nons of Europe's Most Shareholder-Friendly Companies. The winners in our survey, including British food retailer Tesco, French insurer AXA and Anglo-Dutch consumer products maker Reckitt Benckiser, have managements that excel at articulating their business strategies and delivering on their promises. Executives at other winners, such as the German chemicals outfit BASF and the French luxury goods maker LVMH Moët Hennessy Louis Vuitton, take investors down to the shop floor -- both at home or at far-flung operations around the world -- to help them understand the nuts and bolts of the business.

It's easy to see why corporate executives are working so hard to keep shareholders content. A company that ignores its owners can easily fall victim to activist shareholders, as Deutsche Börse discovered last year when hedge funds rebelled over the group's bid for the London Stock Exchange and forced the departures of chairman Rolf Breuer and CEO Werner Seifert.

Companies have to look after the interests of long-term holders just as carefully. With so many pension fund mandates now issued on the condition that asset managers actively exploit the rights attached to ownership, it's becoming harder for shareholders to justify taking the "Wall Street walk" and selling a company's shares rather than confronting its problems, says Lars-Erik Forsgårdh, managing director of the Swedish Shareholders' Association and chairman of the World Federation of Investors. "There's a realization that dumping shares simply passes the problem on to another fund manager. A much broader range of institutional investors is now keeping a watching brief, prepared to rise up where necessary," he says.

To identify Europe's Most Shareholder-Friendly Companies, II canvassed nearly 1,000 analysts and portfolio managers at 376 firms that manage a combined $3.5 trillion in European equities. All were asked to name the companies in their areas of expertise that are the most attentive to shareholders' needs and interests. The survey instructed respondents to consider the quality of the companies' governance and investor relations practices when voting. We present the results in 31 industry sectors in the table below.

Current subscribers click here
To subscribe click here