Analysts to Bayer CEO Start with the simple things, then split up

Bayer CEO Werner Baumann has already put the company on a major overhaul mission to focus on life sciences. But apparently, investors arent satisfied yet. Shareholders are still complaining about how Bayer management is handling the Roundup weedkiller litigation and executives' lack of communication with the market over business information and future stock-moving events, Bernstein analysts Wimal Kapadia and Gunther Zechmann wrote in a letter to Baumann. Their suggestions? “Start with the simple things (communication) and keep going” by settling the Roundup suits, addressing the pharma patent cliff and, last but not least, splitting up. The Bernstein analysts' observation echoes a rare no-confidence vote in management that came out of the company’s annual general meeting in April. There, more than half of shareholders voted against ratifying the Baumann-led executive team’s actions in 2018. One reason? Bayer has made little effort at offering information on the standalone performance progress of Monsanto and the pre-merger crop business, the analysts said. And that doesn't give investors the peace of mind that everything is going according to plan. “In general, information availability vs. peers and willingness to disclose non-material information, is an opportunity for improvement,” they argued. “This matters more than you think.”