- Irene Rosenfeld has been fielding a significant amount of feedback from activist investors like Nelson Peltz and Bill Ackman, which she says takes about one-quarter of her time.
- The activists have suggested Mondelez change everything from product selection and shelf space to marketing and cost-cutting.
- "I’m frustrated with investors’ fascination with activists," she told The Wall Street Journal in a recent interview. "I’m successfully running Mondelez for all shareholders — without the activists’ help." Still, the activists demonstrate the company's value and please shareholders when they encourage stock-price gains.
Mondelez has performed well by certain financial standards with a 68% total return since the company split from Kraft Foods in 2012, which is above the 55% total return of S&P 500 stock index in that time frame and the 52% total return of competitors in the industry. But some feel this still isn't enough and expect more from Mondelez.
"If Mondelez fails to live up to the expectations of investors, or leaves money on the table with respect to the potential for further cost-cutting and margin improvement, the company runs the risk of becoming a target," according to a Sanford C. Bernstein & Co. report released in September.
Such musings have also come from the activists, as Peltz suggested that Mondelez sell itself to PepsiCo to merge with Frito-Lay a few years ago, though he dropped that idea when Rosenfeld offered Trian a board seat in return for his support. Ackman also suggested that Mondelez might make a good target in the consolidating food industry after disclosing his 7.5% stake in the company in August. Rosenfeld isn't alone as a number of food industry CEOs have had to contend with similar activist feedback.
In its latest earnings report, Mondelez posted higher-than-expected profit and sales, though sales declined 18%. The company has been employing zero-based budgeting as part of its $3 billion cost-cutting strategy.