EssilorLuxottica’s Share Capital and Voting Rights Structure: A Model for Corporate Governance and Long-Term Value Creation

EssilorLuxottica’s corporate governance framework is anchored by a unique 31% voting rights cap, a structural innovation designed to prevent the concentration of power among shareholders and ensure balanced decision-making. This cap, codified in Article 23 of the company’s bylaws, limits any single entity to no more than 31% of voting rights, regardless of their equity stake [1]. The mechanism applies to both real voting rights (excluding treasury shares) and theoretical voting rights (including treasury shares), ensuring consistency in governance oversight [2]. This structure has become a cornerstone of the company’s identity, distinguishing it from peers in the healthcare and eyewear sectors, where such caps are rare [3].

The 2018 merger between Essilor and Luxottica provides a critical case study in how this governance model functions. At the time, Delfin, the Luxembourg-based holding company controlled by the Del Vecchio family, contributed a 62.42% stake in Luxottica to the combined entity. Despite this majority ownership, Delfin’s voting rights were capped at 31% to prevent monopolization of decision-making [4]. This move was strategic: it preserved the Del Vecchio family’s influence while ensuring a diverse shareholder base, including institutional investors like Capital Research and Management Company (4.95% stake) and employee shareholders (4.9% via shareholding programs) [5]. The cap also aligned with regulatory expectations under the French Commercial Code and the Autorité des Marchés Financiers (AMF), reinforcing the company’s commitment to accountability [6].

The Del Vecchio family’s equity stake remains a focal point. As of August 2025, they hold 32.26% of the company’s equity but are restricted to 31% voting rights under the cap [7]. This discrepancy highlights the deliberate separation of ownership and control, a design choice that mitigates risks of governance capture. Institutional shareholders, such as FCPE Groupe Essilor 5 et 7 ans (0.9187%) and OFI Invest Asset Management SA (0.1867%), further diversify the shareholder base, reducing reliance on any single entity [8]. This structure has proven resilient, even as the company expanded its share capital through initiatives like the 2025 dividend-in-shares program, which issued 5,638,328 new shares (1.23% of capital) while maintaining the 31% cap [9].

The voting rights cap’s impact on long-term value creation is evident in EssilorLuxottica’s governance outcomes. By 2025, the company had 97,000 employee shareholders across 85 countries, up from 83,500 in 2024, reflecting a successful alignment of employee interests with strategic goals [10]. These programs, including the SuperBoost 2025 and French PEE schemes, raised over €190 million in 2025, underscoring strong internal confidence [11]. The cap also enhances resistance to hostile takeovers by fostering a broad coalition of stakeholders invested in the company’s long-term success. For instance, the Del Vecchio family’s capped voting rights, combined with employee and institutional ownership, create a governance environment where no single group can unilaterally alter the company’s trajectory [12].

Critically, the 31% cap aligns with global corporate governance best practices. The company’s Board of Directors, which emphasizes diversity and independence, operates under a charter that reinforces transparency and accountability [13]. This framework has supported strategic initiatives like the acquisition of Cellview Imaging Inc. and Supreme Holdings, Inc., which expanded EssilorLuxottica’s technological and market reach [14]. Analysts note that while the company’s stock may currently trade above intrinsic value, its governance structure provides a stable foundation for sustained growth [15].

In conclusion, EssilorLuxottica’s voting rights cap is more than a legal formality—it is a strategic tool that balances power, promotes inclusivity, and safeguards long-term value. By preventing any single shareholder from dominating governance, the company fosters a dynamic where diverse perspectives drive innovation and accountability. For investors, this structure offers reassurance that strategic decisions will prioritize broad stakeholder interests over short-term gains, a critical advantage in an industry where brand integrity and operational complexity are paramount.

Source:
[1] EssilorLuxottica’s Voting Rights Cap: A Beacon of Shareholder Balance [https://www.ainvest.com/news/essilorluxottica-s-voting-rights-cap-a-beacon-of-shareholder-balance-25011010bc0f0d4549085989]
[2] EssilorLuxottica: Disclosure of Share Capital and Voting Rights Outstanding as of June 30, 2025 [https://www.globenewswire.com/news-release/2025/07/09/3112779/0/en/EssilorLuxottica-Disclosure-of-Share-Capital-and-Voting-Rights-Outstanding-as-of-June-30-2025.html]
[3] EssilorLuxottica’s Voting Rights Cap: A Beacon of Shareholder Balance [https://www.ainvest.com/news/essilorluxottica-s-voting-rights-cap-a-beacon-of-shareholder-balance-25011010bc0f0d4549085989]
[4] Essilor and Delfin successfully complete the combination of [https://www.essilorluxottica.com/en/newsroom/press-releases/essilor-and-luxottica-combination/]
[5] EssilorLuxottica: Shareholders Board Members Managers [https://www.marketscreener.com/quote/stock/ESSILORLUXOTTICA-4641/company/]
[6] EssilorLuxottica’s Voting Rights Cap: A Beacon of Shareholder Balance [https://www.ainvest.com/news/essilorluxottica-s-voting-rights-cap-a-beacon-of-shareholder-balance-25011010bc0f0d4549085989]
[7] EssilorLuxottica: Shareholders, Shareholding Structure [https://www.marketscreener.com/quote/stock/ESSILORLUXOTTICA-4641/company-shareholders/]
[8] EssilorLuxottica: Shareholders Board Members Managers [https://www.marketscreener.com/quote/stock/ESSILORLUXOTTICA-4641/company/]
[9] Result of the payment of dividends in shares and record [https://www.essilorluxottica.com/en/newsroom/press-releases/result-payment-dividends-2025/]
[10] EssilorLuxottica's employee shareholding plans reach record investment [https://www.essilorluxottica.com/en/newsroom/press-releases/employee-shareholding-plans-reach-record-investment/]
[11] EssilorLuxottica's employee shareholding plans reach record investment [https://www.essilorluxottica.com/en/newsroom/press-releases/employee-shareholding-plans-reach-record-investment/]
[12] EssilorLuxottica: Answers to shareholders' written questions [https://www.marketscreener.com/quote/stock/ESSILORLUXOTTICA-4641/news/EssilorLuxottica-Answers-to-shareholders-written-questions-44888224/]
[13] Governance [https://www.essilorluxottica.com/en/governance/]
[14] EssilorLuxottica Société anonyme (ENXTPA:EL) [https://simplywall.st/stocks/fr/healthcare/epa-el/essilorluxottica-societe-anonyme-shares]
[15] EL Intrinsic Valuation and Fundamental Analysis [https://www.alphaspread.com/security/par/el/summary]