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Investing.com -- Shares of Unilever PLC (LON:ULVR) traded lower on Tuesday following the surprise announcement that Chief Executive Officer Hein Schumacher is set to leave the company.
The consumer goods giant said that Schumacher’s departure will take effect on May 31 and that Fernando Fernandez, the current Chief Financial Officer, has been named his successor.
"We are gobsmacked at the news that Unilever’s very highly regarded CEO Hein Schumacher is to step down after a very successful 18 months in charge. He is to be replaced by the similarly highly regarded CFO Fernando Fernandez but ... gulp," said analysts at RBC Capital Markets in a note.
Schumacher’s tenure at Unilever has been relatively brief, having taken over as CEO from Alan Jope in July 2023. Despite Schumacher’s departure, Unilever has stated that its guidance for 2025 remains unchanged.
"We would see this creating much uncertainty on: a/ the performance in 1Q; b/ what
it means for strategy, esp M&A; c/ what now for additional cost cuts and other acceleration of changes," said analysts at Jefferies in a note.
Fernandez brings considerable experience to his new role. Prior to serving as the company’s Chief Financial Officer, he was the president of Unilever’s beauty and wellbeing unit.
“The Board has been impressed with Fernando’s decisive and results-oriented approach and his ability to drive change at speed. He partnered in the development of the GAP and in driving the productivity programme." Unilever Chairman Ian Meakins said in a press release.
"He has a strong track record of performance and portfolio management, a love of brands and a profound knowledge of Unilever’s operations," he added.
The company also added that Fernando will receive fixed pay of Euro 1,800,000 and will be eligible to participate in an annual bonus and Performance Share Plan awards, in line with Unilever’s policy.
"Valuation is pushing towards best-in-class level that we think is unjustified and risk/ reward is weighted to the downside," RBC added.
An internal and external search process has been initiated to appoint a permanent CFO, while Srinivas Phatak, currently Unilever’s Deputy CFO will serve as acting CFO.
Morgan Stanley (NYSE:MS) added that Hein Schumacher’s urgent departure—while officially contracted until May—raises questions, though he is cited as a “good leaver” with no immediate new position or personal reasons cited.
While Unilever reiterates its guidance, concerns persist given indications of a much slower Q1 performance. Fernandez’s promotion is expected to be well received by many investors, though some may view his leadership style as unconventional.
The Board’s unanimous decision may also prompt speculation on activist investor Nelson Peltz’s commitment to Unilever, given Schumacher was seen as his preferred CEO.
This transition gives the Board and new CEO flexibility to reassess strategy, potentially reviving larger M&A ambitions, as seen with the failed GSK (LON:GSK) CH bid in 1Q22 and recent media speculation on KVUE, which Unilever has not addressed.