Unilever CEO Alan Jope plans to retire at the end of 2023, the maker of Dove soap and Knorr stock cubes said on Monday, roughly two months after activist investor Nelson Peltz joined the board.
Board begins search for successor
Peltz 'looking forward' to being part of choosing a new CEO
Shares rise 2.7%
The British consumer products maker said its board would start a formal search for his successor, considering both internal and external candidates.
Unilever'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, - one for as much as 50 billion pounds ($53.14 billion).
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 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 that Peltz, via his Trian Partners vehicle, had built a stake in Unilever.
"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.
"This at a time when Unilever will be implementing and bedding down a fundamental reorganisation, not to mention dealing with a challenging macro-economic environment."
A source familiar with the matter said Unilever's "unusual" decision to tell the market more than a year before Jope leaves stems from concerns that the news would have leaked before being officially announced.
Trian told Reuters in a statement that 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.
Unilever's shares, which were up 2.7% early on Monday, have underperformed European consumer staples and discretionary indices, as well as most rivals since Jope became CEO in January 2019.