Paul Polman, the former chief executive of Unilever, has criticized activist investors who advocate for corporate break-ups, suggesting their motivations are primarily focused on short-term gains rather than long-term value creation. Polman, who led Unilever from 2009 to 2019, made these remarks amid ongoing discussions surrounding the company’s recent decision to separate its $44.8 billion food division.

Unilever announced in March its plans to spin off the food business—which includes well-known brands such as Marmite, Hellmann’s mayonnaise, and Knorr—merging it with McCormick, an American spice and sauce company. The company described this move as a “growth-led separation” designed to sharpen its focus on home, personal care, and beauty products, where brands like Dove and Axe have outperformed in recent years.

Polman voiced skepticism about the motivations driving such carve-out deals, stating that activist shareholders leverage strategic break-ups to generate short-term financial returns. Although he stopped short of naming individuals, his comments were widely regarded as a reference to Nelson Peltz, the American hedge fund investor from Trian Partners who has been a prominent figure behind the push for Unilever’s restructuring. Peltz, who joined Unilever’s board following his fund’s investment in 2022, has been vocal in advocating for change within the company.

“If you’re in a position of strength, you can handle [activist] pressure. If you’re in a position of weakness, you tend to give in. That has been the sad story of many companies in the history of mankind,” Polman said, alluding to his previous experience fending off a £115 billion hostile bid from Kraft Heinz in 2017.

The announcement of Unilever’s demerger was met with a dip in its share price and drew criticism from some shareholders, notably Terry Smith, a prominent UK fund manager. Smith divested his entire stake earlier this year, accusing the company of abandoning its operational focus in favor of “activist-driven break-ups.” He further claimed that the deal bore “all the hallmarks of Nelson Peltz,” expressing dissatisfaction over being excluded from a shareholder vote on the matter.

Unilever’s current chief executive, Fernando Fernández, has defended the strategy, emphasizing that the company had historically been an “inconsistent” performer and expressing confidence that the separation would deliver long-term value. He has been championing a shift toward the personal care and beauty segments as a driver of future growth.

While Polman did not explicitly critique the combination with McCormick, he cautioned that spinning off divisions alone does not guarantee value creation. He noted that successful outcomes depend on whether the businesses are placed with managers who can enhance performance, or whether the remaining company improves under its new structure. He highlighted ongoing market reactions as evidence that these questions remain unresolved.

During his tenure at Unilever, Polman oversaw a 150% increase in the company’s share price and was known as a proponent of sustainable, long-term business practices. His departure followed a shareholder rebellion that led to the abandonment of plans to consolidate Unilever’s headquarters in Rotterdam, reflecting tensions between management and investors.

Unilever and Trian Partners declined to comment on Polman’s remarks.