Nicolas Hayek saved the Swiss watch industry once. In the early 1980s, when Japanese quartz watches were systematically destroying centuries of Swiss horological heritage — gutting employment, shuttering workshops, and making precision mechanical timepieces seem like a luxury the market no longer wanted — Hayek helped engineer the merger that created Swatch Group and then steered it toward a strategy that used affordable, design-led quartz watches to reclaim market territory while protecting the luxury brands at the portfolio’s top end. The recovery was extraordinary. Swatch Group became one of the most admired corporate turnarounds in European business history. The Hayek name became synonymous with Swiss watchmaking’s survival.
Four decades later, his son Nick runs the company as CEO, his daughter Nayla chairs the board, and his grandson Marc sits alongside them as a director. The family controls approximately 44% of Swatch’s voting rights through a dual-class share structure that gives their registered shares outsized power relative to their economic stake. The company Hayek senior built is, in the hands of his children, a business whose profits fell 75% last year to 219 million Swiss francs, whose revenue has declined to its lowest level in 15 years, whose stock has fallen from 600 francs in 2013 to less than 150 francs today, and whose strategic direction has been questioned by analysts, institutional investors, and proxy advisers with increasing urgency.
Into this inherited and contested landscape, Steven Wood has arrived — for the second consecutive year — to argue, publicly and persistently, that Swatch needs fresh perspectives on its board. On Wednesday, May 13, Swatch Group holds its annual general meeting, and the vote on Wood’s board candidacy is the sharpest test yet of whether institutional pressure can crack a family control structure specifically engineered to resist it.
The Activist and His Thesis
Steven Wood is the founder of GreenWood Investors, a New York-based activist fund that holds approximately 0.5% of Swatch shares. By the standards of activist campaigns at major European companies, his stake is small. By the standards of what the Swatch situation demands, his argument is substantial.
Wood’s investment thesis is not complicated, and it is shared, in varying degrees, by the institutional investors and analysts who have been voicing the same concerns for years. Swatch Group has a portfolio that spans the full spectrum of Swiss watchmaking — from the mass-market Swatch and Tissot brands at the accessible end, through Longines and Rado in the middle, to Breguet, Blancpain, and Harry Winston at the luxury apex. The luxury brands at the top of that portfolio are, in Wood’s assessment and that of most independent analysts, significantly under-exploited relative to their heritage, their craftsmanship credentials, and the price premium that luxury watch buyers are demonstrably willing to pay for comparable competitors.
Richemont, Swatch’s Swiss peer and the owner of Cartier, is the reference point that makes Wood’s argument concrete. Richemont’s watch sales ticked up slightly in 2024 and its shares have risen nearly a fifth so far this year. Swatch’s shares have fallen 27% over five years. The divergence is not explained by brand quality — Breguet and Blancpain are acknowledged by collectors and connoisseurs as among the finest watchmakers in the world. It is explained by strategy, communication, and capital allocation decisions that Wood argues have systematically undervalued the luxury opportunity.
“Revenue is at a 15-year low. I am convinced CEO Nick Hayek is working tirelessly for the company. But it needs more support and fresh ideas,” Wood told Finanz und Wirtschaft. His proposed changes include strengthening the luxury brands Breguet and Harry Winston, better positioning Omega for younger buyers, and improving communication with investors — the kind of changes that every fund manager covering Swatch has been suggesting in private for years.
The Proxy Adviser Endorsements That Raised the Stakes
This year’s AGM is different from last year’s for one significant reason: Institutional Shareholder Services has endorsed Wood’s candidacy. ISS — the world’s largest proxy advisory firm, whose recommendations are followed by a significant proportion of global institutional investors — cited weak long-term performance and governance shortcomings, including a lack of board independence and the continued influence of the Hayek family on Swatch. The ISS endorsement follows a similar stance from the Swiss proxy adviser Ethos Foundation, which backed Wood at last year’s meeting on governance grounds.
The combined support of ISS, Glass Lewis (which has recommended voting against the re-election of the entire supervisory board on independence grounds), and Ethos represents the most significant institutional alignment against Swatch’s current governance structure in the company’s history. Jean-Philippe Bertschy, head of Swiss equity research at bank Vontobel, was characteristically direct: “The chances are very slim,” he told Reuters — but the convergence of major institutional proxy advisers behind Wood’s position means the pressure on the Hayek family, even if it cannot prevail in this vote, is now formally documented and publicly visible in a way it was not a year ago.
The mathematics of the vote are unfavourable for Wood. To be elected to the board, he needs to win over the Hayek family’s 44% voting bloc — or secure such an overwhelming margin among other shareholders that it overcomes the family’s block. The dual-class share structure means bearer shareholders, who own a majority of the share capital, do not have proportional voting rights. Wood is specifically seeking to represent those bearer shareholders — the institutional and retail investors whose economic exposure to Swatch is largest but whose voice in governance is weakest. That structural injustice is part of his argument, but it does not change the arithmetic of Wednesday’s vote.
What the Vote Cannot Change and What It Already Has
Swatch’s board has recommended rejecting Wood’s nomination. The company is simultaneously proposing the appointment of Andreas Rickenbacher — a former Bern cantonal minister and business consultant — as a new board member, a move that can be read as a concession to the governance criticism without conceding the substance of it. Adding one external director while resisting the candidacy of an investor explicitly advocating strategic change is the classic institutional response to governance pressure: absorb the form of the criticism without accepting its content.
If Wood is defeated on Wednesday — which remains the most likely outcome given the Hayek voting position — he has signalled he will consider requesting an extraordinary general meeting to ensure the election of a bearer shareholder representative is conducted in accordance with Swiss law. That threat is not empty. An EGM would prolong and amplify the public governance debate, extend the institutional pressure, and ensure that the strategic questions Wood is raising about luxury brand exploitation, Omega’s positioning, and investor communication remain live issues throughout 2026 and into 2027.
Nick Hayek has periodically suggested he could take the company private — a formulation that simultaneously signals his contempt for the pressure and his recognition that it is meaningful enough to warrant a response. A company trading at less than 150 francs when it traded at 600 less than 13 years ago, with profits down 75% and revenue at a 15-year low, is not obviously a candidate for a premium privatisation that benefits minority shareholders. The threat is more revealing of Hayek’s frustration than of his strategic intentions.
The Luxury Opportunity Being Left on the Table
The business case for what Wood and the institutional investors behind him are arguing is visible in every major luxury watch market report published in the past two years. The global luxury watch market has recovered strongly post-pandemic, driven by demand from younger buyers who associate mechanical watchmaking with authenticity, craft, and the kind of durable value that fast-fashion alternatives cannot offer. Patek Philippe waitlists extend years. AP Royal Oak models trade at multiples of retail on the secondary market. Richemont’s Cartier is growing.
In that environment, Breguet — a brand whose history predates most European nation-states, whose movements are studied in horological institutes, and whose clientele includes royalty and heads of state — has seen its market presence diminish rather than strengthen. The brand that invented the tourbillon is fighting for relevance in a market where the appetite for exactly what it makes has never been stronger.
That is not a market failure. It is a management and strategic communication failure. And it is, at its core, what Steven Wood flew to Biel to say.
Whether the Hayek family is willing to hear it — in the boardroom, if not in the shareholder vote — is the real question that Wednesday’s AGM is testing.
Written by Shalin Soni, CMA specializing in financial analysis, global markets, and corporate strategy, with hands-on experience in financial planning and analytical decision-making.
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Source: Based on Reuters and publicly available financial information,