Unilever chief executive Paul Polman will step down in January, bringing an end to a decade at the helm of the consumer products giant months after he lost a bruising fight with shareholders over moving its headquarters out of London.
Mr Polman will be succeeded by Alan Jope, the Scottish executive who has been running Unilever’s beauty and personal care business, its biggest division.
Mr Polman’s attempt to simplify Unilever’s Anglo-Dutch corporate structure by consolidating its headquarters in Rotterdam exposed tensions between the company’s leading duo — the chief executive and chairman, fellow Dutchman Marijn Dekkers — and UK shareholders. Investors felt the company was seeking cover in the Netherlands where a hostile takeover like that attempted by Kraft Heinz last year would be impossible.
Mr Dekkers on Thursday rejected the idea that Mr Polman’s departure was linked to the aborted corporate simplification effort, or that Mr Jope’s nationality played a role in his selection. In earlier years, the power-sharing at Unilever meant the chairman and chief executive roles tended to be divided among Dutch and British executives.
“After an extensive process, we chose the best available candidate independent of nationality,” Mr Dekkers said. “The choice of Alan stands for continuity.”
Nevertheless, the departure of Mr Polman, a prominent advocate of so-called multi-stakeholder capitalism that requires companies to be conscious of their wider social impact, signals an end of an era at Unilever.
Like other global consumer goods groups, the company is trying to retain consumer loyalty as their tastes and buying habits change rapidly, and online shopping reorders the decades-long hierarchy in retail.
Unilever’s shares have far outperformed the FTSE 100 index during Mr Polman’s tenure, rising about 150 per cent since 2009, while the FTSE is up 70 per cent. He has described his successful fight against the hostile Kraft Heinz takeover as a “near-death experience”.
Mr Polman’s last significant act is likely to be a medium-sized acquisition to build out Unilever’s presence in India; it is the finalist in talks to buy GlaxoSmithKline’s consumer nutrition business, which makes malted drink Horlicks.
The 54-year-old Mr Jope has been at Unilever for his whole career. He rose through the ranks with stints in big emerging markets such as China and Russia, as well as the US. Mr Pohlman will stay on during a six-month transition, the company said on Thursday.
“This isn’t an external ‘rock star’ appointment, which might come as a disappointment to some,” said RBC analyst James Edwardes Jones.
But Mr Jope “is a deep thinker about his category”, Mr Jones said, adding he has a record of doing “small bolt-on acquisitions, which might suggest this is going to be the way of capital allocation”.
UBS analyst Pinar Ergun said Mr Jope had a strong record in beauty and personal care. “Under his leadership the division delivered 3.6% organic sales growth and its ebit [earnings before interest and tax] margin reached 21% — one of the highest in the industry,” she said.
One of Mr Jope’s biggest decisions will be whether to keep ambitious targets for both sales and margin growth that Mr Polman set shortly after warding off the Kraft Heinz bid. Those call for 3 per cent to 5 per cent sales growth and taking the margin to 20 per cent by 2020, putting Unilever in a delicate position as it tries to slash costs and stoke demand for new products at the same time.
Mr Polman had been seeking to prove to the markets that rejecting Kraft Heinz was not only the right move, but that he had the recipe for keeping Unilever’s sales and profits growing simultaneously, something that is traditionally difficult to do in the industry.
Asked whether Mr Jope would stick to the 2020 targets, Mr Dekkers said it was not his role to comment on guidance, but that Unilever had made good progress. “That’s not a confirmation, but an indication that we are on track,” he said.
In a further sign that Unilever is seeking continuity, the company said chief financial officer Graeme Pitkethly would be staying at the company. Some investors had speculated that Mr Pitkethly might leave given the prominent role he played in lobbying shareholders over the botched headquarters move, as well as the sense that he may have been a candidate for the top job himself.
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