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Reckitt CEO Becht shock retirement hits shares

Reckitt CEO Becht shock retirement hits shares
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First Published: Thu, Apr 14 2011. 06 17 PM IST
Updated: Thu, Apr 14 2011. 06 17 PM IST
London: British consumer goods group Reckitt Benckiser shocked investors by saying its 54-year old star CEO Bart Becht is to retire and be replaced by Reckitt veteran Rakesh Kapoor, sending its shares sharply lower.
The move comes only months after finance director Colin Day stepped down following a decade when Becht and Day transformed a sleepy perennial underperformer into one of the FTSE 100 index’s top stocks and earned Becht a mega payout in 2009.
“It was one of the most highly regarded management teams, I would have said in the FTSE. The fact that they’ve both gone now I think is basically going to cause some people to reassess,” said analyst Martin Dolan at brokers Espirito Santo.
Reckitt shares were down 7.1% at 31.28 pounds by 03:15 pm on Thursday, the biggest faller in a slightly lower FTSE 100, after the maker of Cillit Bank cleaners and Nurofen painkillers had done little wrong over the last decade.
Marketing chief Kapoor, who has been with Reckitt for 25 years, will become chief executive on 1 September, with Becht staying on as part-time adviser and on the company’s board until September 2012 to ensure a smooth transition.
Reckitt said Becht would focus on charitable work and look at non-executive directorships after over 11 years at the head of the fast-growing group, but he was not looking at any future chief executive positions.
“Bart thinks it is a good time to step down. His team is the best he’s ever had, he’s done a major acquisition in SSL and has weathered the initial storm of recession, so there are no major issues around,” said a Reckitt spokeswoman.
His replacement, the 52-year old Kapoor, started work with Reckitt in India and then ran its healthcare business in northern Europe before becoming its chief marketing guru for the last five years in charge of driving growth at its 19 top brands such as Finish dishwasher products and Lysol disinfectants.
Kapoor was one of the architects behind Reckitt’s expansion into health and personal care with the acquisition of Boots’ Strepsil and Clearasil business in 2006, and then later the SSL Durex condoms and Scholl footcare company and Indian ointments and cold remedy group Paras Pharmaceuticals.
“Kapoor looks like a safe pair of hands, but the Becht-Day team will be sorely missed,” said one industry analyst.
Becht has led Reckitt since its formation from Reckitt & Colman’s takeover of Benckiser in December 1999, and its shares have been one of the best performers in the FTSE 100 index over the last decade as they have more than quadrupled while the index has fallen by over 10%.
This stellar performance led to Becht being the best paid CEO amongst Britain’s top 100 companies taking home 92 million pounds in 2009 which drew criticism of excessive greed from politicians but not from his major shareholders.
But this year the picture is less rosy with Reckitt shares falling around 15% under pressure from higher raw material costs, lower market growth and stiffer competition from rivals Procter & Gamble and Unilever.
The 54-year-old Day announced he would step down as Reckitt finance director last October and was replaced by Liz Doherty earlier this year. Day, who had expressed his desire to become a chief executive, was appointed CEO of plastics and fibre products group Filtrona in January.
Reckitt said Becht had expressed his desire to retire to the company’s board after Day had left the group.
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First Published: Thu, Apr 14 2011. 06 17 PM IST
More Topics: Reckitt Benckiser | FMCG | Bart Becht | CEO | Shares |