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February 4, 2013 9:39 pm
The announcement that chief operating officer (COO) Geoff Eaton was leaving with immediate effect came on new chief executive Gavin Darby’s first day at the company.
Mr Eaton joined barely three months ago on a package understood to be worth about £500,000 a year. Analysts suggested the announcement gave an insight into how Mr Darby’s strategy will differ from that of his predecessor Mr Clarke, who took up the reins 18 months ago with a mandate to turn round what was once the UK’s biggest food producer.
Mr Clarke, whose departure was announced last Monday, hired Mr Eaton as chief operating officer in October, saying he required help to “accelerate” the company’s restructuring.
Mr Darby, by contrast, appears to be aiming for a flatter management structure and is eliminating the COO role. But while the move to cut the payroll may please investors, Martin Deboo, analyst at Investec Securities, said the continued revolving door policy heaped more uncertainty on to a company that “desperately needs consistency”.
Mr Eaton, who was passed over for the top job, is not the first of Mr Clarke’s hires to leave Premier Foods. Iwan Williams, who was appointed as managing director at the end of October 2011, left last week.
Graham Hunter, a managing director at Northern Foods selected to run the groceries division, did not even reach his desk – choosing instead to join private equity-owned Tangerine Confectionery as chief executive.
Some analysts had criticised Mr Clarke’s predilection for hiring, arguing that a group with net debt of nearly £1bn could ill-afford extra layers of management. Mr Clarke justified the extra roles on the basis of the scope of the turnround and complexity involved in exiting manufacturing businesses.
“Senior role proliferation at Premier has been a concern for us and our experience is that incumbent COO’s rarely survive new chief executives,” said Mr Deboo. “So Geoff Eaton’s departure is not a surprise.”
Premier Foods said there were no more anticipated changes to the remaining management team.
Mr Eaton was formerly chief executive of Uniq, the struggling convenience foods group bought by its Irish rival Greencore in 2011.
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