Bausch + Lomb's AGM Crossroads: Governance Tensions and Investment Opportunities

The 2025 Annual General Meeting (AGM) of Bausch Health Companies Inc. (BHC), parent to the iconic Bausch + Lomb brand, revealed a critical juncture in corporate governance. While the company’s shareholders overwhelmingly re-elected its 10 directors, the starkly uneven “For” versus “Withheld” vote distributions across nominees—particularly for Brett M. Icahn and John A. Paulson—signal deepening investor scrutiny of strategic priorities and governance structures. This analysis dissects how shareholder sentiment, regulatory moves, and market dynamics could reshape Bausch Health’s trajectory in the highly competitive eye health sector.

The Vote Discrepancy: A Mirror of Governance Concerns

The most striking data point is the 15.16 million withheld votes for Brett Icahn, son of investor Carl Icahn, compared to 8.43 million withheld votes for Chairman John Paulson. This divergence hints at shareholder unease about the Icahn family’s influence, despite Carl Icahn’s equity swaps holding no voting rights. The Board’s recent review of these swaps—covering 24.6% of shares via cash-settled agreements—suggests an attempt to preempt activist pressure, but the voting gap indicates distrust persists.

Meanwhile, Paulson’s relatively lower withheld votes reflect his proactive steps to divest bond holdings and avoid conflicts of interest. This contrast underscores a critical divide: investors appear more comfortable with Paulson’s transparency than with the Icahn-linked governance risks, even if Carl Icahn’s stake lacks direct control.

The Shareholder Rights Plan (SRP): Defensive or Restrictive?

Bausch Health’s adoption of an SRP in April 2025—which prevents shareholders from accumulating over 20% of the company without Board approval—adds another layer to this governance debate. Proponents argue it safeguards against “creeping” takeovers that might favor a minority, but critics see it as a tool to entrench management or deter value-accretive bids. The SRP’s timing, coinciding with Icahn’s disclosed stake, amplifies the perception of an anti-takeover shield.

Investors must weigh whether this plan fosters stability or stifles innovation. A reveals modest gains, but its valuation lags peers like Johnson & Johnson (JNJ) in eye health. This could signal skepticism about governance or strategic execution.

Executive Compensation Approval: A Vote of Confidence—Or a False Signal?

Shareholders overwhelmingly approved the non-binding advisory vote on executive compensation, with over 90% “For” votes across all nominees. This suggests broad acceptance of management’s leadership, especially in navigating regulatory and operational challenges. However, the withheld votes for individual directors complicate this narrative. A CEO who secures 98% approval in compensation but faces high dissent on governance (e.g., Brett Icahn’s role) creates cognitive dissonance.

The approval of the 2025 Employee Stock Purchase Plan (ESPP) further signals stability, as it aligns employee incentives with shareholder value. Yet, the ESPP’s reliance on a Toronto Stock Exchange exemption raises questions about corporate flexibility—could this constrain agility in a fast-evolving market?

Strategic Imperatives: Eye Health Markets Demand Agility

Bausch Health’s core eye health business—driven by Bausch + Lomb’s dominance in contact lenses, glaucoma treatments, and surgical solutions—faces intensifying competition. Johnson & Johnson’s acquisition of Abbott’s eye care division and Novartis’s investments in ophthalmic drugs highlight the sector’s consolidation trends. For Bausch Health to maintain relevance, it must balance defensive governance with aggressive R&D and market expansion.

The withheld votes for Brett Icahn may reflect skepticism about whether the Board’s focus on shareholder rights plans and legal reviews detracts from innovation. A would reveal if the company’s investment in new therapies keeps pace with industry demands.

Investment Implications: Opportunities Amid Uncertainty

Despite governance headwinds, Bausch Health’s fundamentals remain compelling. Its $15 billion market cap, diversified product portfolio, and strong cash flows provide a solid foundation. The AGM results suggest management retains broad support, but the dissent underscores the need for transparency and strategic clarity.

Buy Signal: Investors seeking a defensive play in healthcare may find value here, especially if the SRP deters dilutive takeovers while allowing organic growth. The recent stock price dip () could present an entry point, assuming the company executes on its growth initiatives.

Risk Factors: The Icahn stake’s maturity in 2028 introduces uncertainty. Should Carl Icahn seek voting control at that point, the SRP could face legal challenges, creating volatility. Additionally, a failure to innovate in glaucoma or digital eye care solutions could erode margins.

Conclusion: A Governance Crossroads, but Potential Ahead

Bausch + Lomb’s AGM results reveal a company at a crossroads: shareholder sentiment is divided between trust in leadership and anxiety over governance asymmetries. For investors, the challenge is to discern whether the Board’s defensive measures and strategic focus can align with the growth demands of a $200 billion eye health market.

The approval of executive compensation and the ESPP suggests stability, but the voting gaps for key directors demand vigilance. This is a stock for investors willing to bet on Bausch Health’s entrenched market position while monitoring governance developments closely. For now, the signal is mixed—but with a well-executed strategy, Bausch Health could still deliver outsized returns in a sector ripe for consolidation.

Act now, but stay informed.