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Home BUSINESS Unilever's problems won't go away with your boss

Unilever’s problems won’t go away with your boss

mevery incoming The CEO wants to see his employer’s stock price rise on the news of his appointment. No outgoing boss wants to see the same thing happen when he announces his departure, especially if a successor has yet to be named to impress the market. That was the fate of Alan Jope after he declared on September 26 that he would retire next year. The market value of the consumer goods giant rose as much as 3.5% and ended the day up 1.8%.

Both Unilever and Jope present the measure as their decision. The fact that she has been on the job since just 2019, is 59 years old and is apparently in good shape suggests she had help to pull it off. So does Unilever’s lackluster stock performance, especially compared to its main rivals, Nestlé and Procter & Gamble (see chart). Whether his departure will be enough to revive the 130-year-old soap-to-soup conglomerate is another question.

When Jope first took the helm less than four years ago, investors had high hopes for him. He had experience in China, a major growth market, and had led Unilever’s personal care division, seen by many as key to the company’s future. He also seemed like a welcome pragmatic antidote to his self-righteous predecessor, Paul Polman, an early proponent of corporate social responsibility and environmental, social, and economic G) business considerations. While laudable in many ways, Polman seemed at times to view shareholders as an annoying afterthought.

Joppa can point to some successes. Under him, Unilever finally shed its convoluted dual structure, with headquarters in Rotterdam and London, and consolidated its corporate home in Britain. He finalized the proposed sale of the company’s tea business. The market saw its strategy of prioritizing health and hygiene businesses over slow-moving food operations as the right path. And he ran the company through the initial pandemic panic, mostly from his Edinburgh studio.

A sensible strategy and capable crisis management were not enough to make up for Jope’s missteps. He stuck to Polman’s target of 20% for operating margins even if it meant sacrificing revenue growth. Investor confidence then eroded as sales and earnings expectations said. They brought up sustainability again, prompting one major shareholder, Terry Smith, a fund manager, to complain that a company “that feels like it has to define the purpose of Hellmann’s mayonnaise … has clearly lost its way.” “. The final straw was Jope’s bid in January to acquire the consumer health unit of GlaxoSmithKline, a drugmaker, for 50 billion pounds ($68 billion at the time). Investors saw the deal as a reckless gamble and it ultimately fell through, but not before becoming a “lightning rod for [their] frustration,” says Martin Deboo of Jefferies, an investment bank.

Mr. Jope’s successor will not have an easy task. It is quite possible that he or she will take over after the recession, but before inflation subsides. The future chief executive will also face renewed calls from investors to break up the company into food and home and personal care businesses, and will have to contend with Nelson Peltz, a Bolshie hedge fund manager who joined Unilever’s board last year. two months. . And the conflicting pressures to stand firm on is G on the one hand, as many consumers and politicians demand, and to increase sales and margins, on the other, to place investors, they are becoming more and more acute. Voluntary or not, retirement doesn’t seem like such a bad idea.

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