Abstract
The LVMH (Moet Hennessy Louis Vuitton SA) luxury brand has the following shareholder capital structure described in Figure 1-1 below. The main shareholders are the Group Arnault with 47% shares in personal property. 28% of the shares are held by foreign institutional
investors and 17% are held by French institutional investors. 5% of shares are held by individuals and 2% are treasury stock.
The Arnault Group has, due to the 47.6% of its shares of LVMH, a shareholder voting right of 63.64% of the total votes (LVMH, 2009). Due to this fact LVMH can be controlled with majority votes by the Arnault Group without dissension by other shareholder. Arnault focuses on long-term investment to create new values by investing money. On the other side, the minority shareholders are interested in high returns of investment by rising value of shares and high dividends. This perspective has a short term focus with a high profitability.
Because of the different perspectives of company behavior, the investment of money by Arnaults makes no sense, because he would support the passive minority shareholders in earning a higher profit without own investment. Further the position with majority vote by the Arnault Group can lead to a missing objectivity and transparency in control of LVMH by Arnaults interests. At the other side, the minority shareholder have no own majority to achieve their aims against the Arnault Group's opinion (Hanson, 2010).
