In May 2026, chaotic scenes broke out from New York to Tokyo as collectors scrambled — and occasionally brawled — for a $450 plastic watch. The 'Swatch Royal Pop,' a collaboration between Swatch Group and luxury watchmaker Audemars Piguet, sold out within hours. It was a reminder that few companies understand hype like the Swiss conglomerate behind sixteen brands, from cheap plastic Swatches to ultra-luxury Breguet timepieces. But the hype masked a crisis. Swatch's net profit had just collapsed almost 90%, to a meager SFr25 million in 2025, following a 75% drop the year before. Its market capitalisation now sits below where it stood more than a decade ago.
This financial slide has ignited a governance war. Swatch is controlled by the Hayek family — CEO Nick Hayek and Chair Nayla Hayek, the children of founder Nicolas Hayek, who rescued the Swiss watch industry in the 1980s by inventing the affordable plastic Swatch. The family operates through a 'pool,' meaning they vote their shares as one bloc. Here's the twist: the Hayek pool owns about 26% of Swatch's economic equity but controls roughly 44% of its voting rights. That gap exists because of a dual-class share structure — a system in which two types of stock are issued, with one class carrying outsized voting power.
Enter Steven Wood, an American activist investor whose firm, GreenWood Investors, holds just 0.5% of Swatch. Wood has tried twice to win a board seat representing 'bearer shareholders' — the non-family public investors whose holdings aren't registered to the Hayeks. He argues Swatch should focus more aggressively on its luxury brands like Breguet and Blancpain, modernize its governance, and develop a real succession plan: Nayla Hayek is 74 and Nick Hayek is 71. The family has refused. In May 2026, Wood lost a second shareholder vote, with 79.6% rejecting him overall. But among bearer shareholders specifically, he won 80% support — a striking signal of how isolated the family has become from its public investors.
The activist isn't alone. Influential proxy advisers ISS and Glass Lewis — firms whose recommendations guide how large pension and mutual funds vote — both backed Wood and urged investors to oppose the re-election of Nick Hayek, Nayla Hayek, and her son Marc. Even Swiss pension funds, traditionally polite about domestic corporate disputes, have grown publicly critical. Vincent Kaufmann of Ethos, a Swiss pension-fund advisory group, has called Swatch one of the worst governance setups in Switzerland.
The Hayeks counter that critics are obsessed with 'short-termism.' They argue that family control allows for long-horizon investment in Swiss manufacturing, vertical integration, and brand heritage that fickle outside shareholders would destroy. Nick Hayek has even hinted he could take Swatch private. But the underlying business is wobbling: sales in China — once the engine of luxury growth — have weakened sharply, and rival Richemont, which owns Cartier, has continued to grow while Swatch contracts. Analysts believe Omega, long second only to Rolex in prestige, has slipped behind Audemars Piguet and Patek Philippe. The deeper question lurking beneath the Swatch fight isn't really about watches. It's about whether founding families, dual-class shares, and Switzerland's quietly clubby version of capitalism can still deliver in an era of impatient global capital — or whether 'long-termism' has become a polite name for refusing to change.
Source: https://www.ft.com/content/swatch-hayek-family-governance
Imagine inheriting the world's biggest watch empire — then watching your stock crater 75%, an American activist storming your boardroom, and Swiss pensioners calling you the problem. Welcome to Swatch.
Swatch Group — the Swiss giant behind Omega, Longines, Tissot, Breguet and the plastic Swatches your parents wore in the 80s — is in the worst slump of its modern history. Net profit collapsed almost 90% in 2025 to just SFr25 million, and the share price is down to levels last seen over a decade ago.
The founding Hayek family, which controls the company through a special share structure, says critics are obsessed with short-term profits. Outside investors — led by American activist Steven Wood of GreenWood Investors — say the family is hoarding power, ignoring shareholders, and dragging a once-iconic brand into irrelevance.
This is a fight about who actually owns a public company when the founding family holds the steering wheel but other people paid for most of the car.
If you ever buy a stock, work at a startup that IPOs, or hold an index fund (your future 401k will), you're a shareholder — and dual-class structures decide whether your vote actually counts. Swatch is also a case study in a bigger question facing luxury, tech, and family businesses everywhere: when does 'long-term thinking' become an excuse for ignoring decline? China's slowdown is hammering luxury brands globally, and how Swatch responds will signal whether heritage companies can adapt or become museum pieces.
Wood lost the May 2026 vote but has hinted at legal action, and Swiss pension funds are starting to grumble publicly — rare in a country that prizes corporate quiet. Watch (pun intended) for three things: a possible Hayek move to take Swatch fully private, a generational handoff to third-generation Marc Hayek, and whether China's luxury appetite recovers. The deeper drama is whether Switzerland's clubby, family-led capitalism can survive in an age of activist investors, ETF voting power, and impatient global capital.