Ericsson’s Leif Johansson to step down as chairman in 2018
Leif Johansson, former Volvo AB CEO, has decided to not stand for re-election at the company’s 2018 annual meeting
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Paris: Ericsson AB chairman Leif Johansson agreed to step down next year after seven years in the job, completing an overhaul of top management at the embattled Swedish network company.
The time is right for Johansson to leave since chief executive officer Borje Ekholm took over in January, the chairman said in a statement on Wednesday. Activist investor Cevian Capital AB also took a stake in the Stockholm-based company this year. Johansson, a former chief executive officer at truckmaker Volvo AB, has been in the job since 2011.
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“The company now enters a new phase, with focus on execution, and we also have a new ownership constellation,” Johansson said in the statement. “It is natural to let the owners jointly propose a chairman and well ahead of this I want to announce that I will not be available for a next term.”
Ericsson’s main shareholders, Sweden’s Wallenberg family and billionaire Fredrik Lundberg, will be looking for a new chairman to work with Ekholm to revive the share price. Ericsson stock has fallen by more than half in the past decade amid fierce competition and a slowdown in spending by wireless carriers. Moody’s Investors Service in May cut the company’s credit rating to junk, and the firm highlighted the risks of Ekholm’s turnaround plan.
Ericsson rose 0.4% to 61.1 kronor at 9:31 a.m. in Stockholm, giving the company a market value of 203.3 billion kronor ($23.9 billion).
“I respect Leif’s decision to not be available for re-election as Ericsson now enters a new phase,” Cevian co-founder Christer Gardell said in an email. The activist investment firm built a stake in Ericsson earlier this year. “I don’t wish to comment further on the work that lies ahead for the nomination committee, which I am myself part of.”
Johansson, 65, a former Volvo AB CEO, won’t stand for re-election at the company’s 2018 annual meeting, according to the statement. The nomination committee has begun looking for a replacement. Bloomberg