Unilever boss to leave next year after rocky era for grocery products giant
Unilever makes a huge range of grocery products, including Hellmann's, Domestos, Knorr, and Magnum ice cream.
Unilever said chief executive Alan Jope would retire at the end of next year, announcing the move less than a year after a bungled attempt to buy GSK's consumer healthcare business, and two months after activist investor Nelson Peltz joined the board.
The British consumer products maker said its board would start a formal search for a successor to Mr Jope, a Unilever veteran who took up his role at the start of 2019, considering both internal and external candidates. Unilever makes a huge range of grocery products, including Hellmann's, Domestos, Knorr, and Magnum ice cream.
Unilever's shares fell 4%. The company's search begins at a time of soaring food and energy prices which are hitting household budgets and hurting consumer confidence.
The company will be looking for a new CEO at the same time as rival Reckitt, the maker of Dettol products and Finish dish soap.
Unilever has had a rocky start to the year after mounting three bids for the consumer health arm of GlaxoSmithKline, or GSK, one for as much as £50bn (€56bn).
The move was met with disapproval from shareholders, some of whom also criticised Unilever for prioritising sustainability over core growth.
"This may signal more welcome future change at Unilever," Tineke Frikee, fund manager at Unilever investor Waverton Asset Management, said.
"The unappealing plan to buy consumer healthcare from GlaxoSmithKline has tainted Mr Jope’s track record somewhat so a fresh start from a new CEO could convince investors Unilever’s momentum is trending upwards again," the fund manager said.
The company in January also announced plans to cut about 1,500 management jobs and reshape its business to focus on five main product areas, days after it was revealed Mr Peltz, via his Trian Partners vehicle, had built a stake in Unilever.
Trian said in a statement it was sorry to learn of Jope's decision to retire.
"As a board member, Trian’s CEO Nelson Peltz looks forward to continuing to work closely with Alan until his departure and to being part of the process of choosing a new leader for the company," it added.
A Unilever spokesperson said the company was "fully committed to the organisational changes" and Mr Jope was "completely committed to delivering against that strategy".
Mr Jope has worked at Unilever for more than 35 years, holding various senior leadership positions, including being head of the personal care division from 2014.
"I think Jope’s tenure as CEO was a bit of a mixed bag," Jack Martin, fund manager at Unilever shareholder Oberon Investments, said. "It has been a very impressive career nonetheless, joining as a trainee in the '80s and ending up as CEO of one of the UK’s largest listed companies," he said.
Unilever's shares have underperformed European consumer staples and discretionary indices, as well as most rivals since Mr Jope became CEO.
"Our immediate concern is that this leaves 15 months until his retirement with a CEO who might be seen to have lost credibility with employees and other stakeholders," RBC analyst James Edwardes Jones said.
A source familiar with the matter said Unilever's "unusual" decision to tell the market more than a year before Mr Jope leaves stems from concerns the news would have leaked before being officially announced.
"While his has undoubtedly been a great career, investors are likely to see this as a positive change, as the company has struggled in recent years to convince investors that it has the right brands and strategy to be a mid-single digit growth company," Bernstein analyst Bruno Monteyne said.
• Reuters
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