CEO Alan Jope to Exit Unilever in 2023, Capping a Period of Turmoil and Change
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LONDON – After months of turmoil and the arrival of the activist investor Nelson Peltz on the board of directors, Alan Jope plans to step down as chief executive officer of Unilever next year.
The company said Monday that Jope will retire at the end of 2023, after five years in the role. The board said it plans to proceed with a formal search for his successor and will consider both “internal and external” candidates.
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Unilever shares were up 2.8 percent at 41.41 pounds in early morning trading following the announcement.
Chairman Nils Andersen said that since Jope took up the CEO role in 2019, Unilever “has seen improved performance, enabled by its clear strategic choices and a significant company transformation. Alan’s retirement next year will mark the end of a remarkable career with Unilever.
“Under his leadership, Unilever has made critical changes to its strategy, structure and organization that position it strongly for success. This work continues, and we will thank Alan wholeheartedly for his leadership and contribution to our business when he leaves next year,” he added.
Jope said that, following more than 35 years in Unilever, “I believe now is the right time for the board to begin the formal search for my successor. Growth remains our top priority, and in the quarters ahead, I will remain fully focused on disciplined execution of our strategy and leveraging the full benefits of our new organization.”
The announcement of Jope’s departure caps nine months of disruption at the owner of brands including Dove, Vaseline and Ben & Jerry’s. Late last year, Unilever made a botched attempt to purchase GlaxoSmithKline’s Consumer Health business, which is now a public company called Haleon, quoted on the London Stock Exchange.
Unilever’s move – and the price it was willing to pay for the division – irked shareholders, tarnished Jope’s image and saw Unilever’s share price collapse. GSK rejected three bids from Unilever, the final one valued at 50 billion pounds.
As that drama was unfolding, the activist investor Nelson Peltz’s Trian Fund Management made an investment of nearly $2 billion in Unilever, and over the summer Peltz joined the board as a non-executive director.
Financial analysts had been hoping that Peltz would join the board at some point and start working with management, as he did with Procter & Gamble a few years ago.
Following the failed bid, Unilever also shook up its way of working and restructured is management teams in order to become “a simpler, more category-focused business.” It has moved away from its former “matrix structure” and is now organized around five business groups: Beauty & Wellbeing, Personal Care, Home Care, Nutrition and Ice Cream.
Each business group is “fully responsible and accountable for their strategy, growth and profit delivery globally,” Unilever has said.
The new model resulted in a reduction in senior management roles of around 15 percent and more junior management roles by 5 percent, equivalent to around 1,500 roles globally.
Before succeeding Paul Polman as CEO, Jope served as president of beauty and personal care, Unliever’s largest single division. There, he pursued an aggressive acquisitions plan, snapping up high-end beauty companies such as Kate Somerville and Ren in a bid to broaden the portfolio and elevate the offer.
He joined the company as a graduate marketing trainee in 1985, and has experience both in developed and emerging markets, having run the company’s North Asia business for four years and served as president, Russia, Africa and Middle East. He spent more than a decade in senior foods, home care and personal care roles for Unilever in the U.S.
Jefferies described the announcement as a “surprise,” but said it expected the markets to view the developments “positively. Jope’s reputation took a heavy knock on the back of the rejected bid for what is now Haleon, plus some unwelcome earnings surprises.”
The bank added that the long lead time on Jope’s departure “should facilitate continuity into what is a big organizational change, and allow the board to think and look hard” about the company’s next leader.
Pierre Tegner at Otto is also expecting a positive reaction from markets. “Jope is not well-perceived by some investors who were expecting faster changes at the group level in terms of portfolio reshuffle,” Tegner wrote on Monday morning.
He added that Jope “has done, in our view, a good job, but he has been shy in taking some distance with the previous top management (former Unilever CEO Paul Polman), and he has been too focused on the improvement of the operational execution versus refocusing the company on less strategic battles. The proposal for the GSK Consumer Health division … illustrated the fact that strategic alternatives were too brutal.”
RBC said that Jope’s retirement “is not a total shock, other than it seems premature to publish such an announcement 15 months before the expected event.”
The bank added that Jope’s tenure, “has not been without difficulties, in our view. We still don’t have worthwhile visibility on whether the drive to improve revenue growth will have succeeded in a post-COVID, post-rampant-inflation world, while the abortive attempt to acquire Haleon on his watch did not impress us.”
