Unilever CEO’s swift departure fuels rumours of boardroom rift
Unilever chief executive, Hein Schumacher, is to leave the group less than two years since joining.
His swift departure has ignited speculation of a boardroom fall-out with calls to speed up the consumer goods and foods group’s efforts to boost profits.
Unilever operates a key home and personal care manufacturing site and research and development facility at Port Sunlight, Wirral.
Schumacher joined the group on July 1, 2023, replacing outgoing CEO Alan Jope.
Today, the group announced that he will step down as CEO and as a board director on March 1, by mutual agreement and will leave the company on May 31, 2025.
It said Fernando Fernandez, who is currently Unilever chief financial officer and executive director, will be appointed chief executive effective from March 1
Prior to becoming CFO in January 2024, Fernandez had a successful tenure as president of Beauty & Wellbeing, one of Unilever’s fastest growing businesses.
In previous roles as president Latin America, CEO Brazil and CEO Philippines, he led some of the company’s best performing markets, delivering strong financial results while developing exceptional talent, the Unilever stock exchange announcement said.
Unilever chairman, Ian Meakins, said: “On behalf of the board, I would like to thank Hein for resetting Unilever’s strategy, for the focus and discipline he has brought to the company and for the solid financial progress delivered during 2024.
“Hein introduced and led a significant productivity programme and the commencement of the Ice Cream separation, both of which are fully on track. The Growth Action Plan (GAP) has put Unilever on a path to higher performance and the board is committed to accelerating its execution. We are grateful for Hein’s leadership, and we wish him the very best for the future.”
He added: “The board has been impressed with Fernando’s decisive and results-oriented approach and his ability to drive change at speed.
“While the board is pleased with Unilever’s performance in 2024, there is much further to go to deliver best-in-class results.
“Having worked with Fernando closely over the last 14 months, the board is very confident in his ability to lead a high performing management team, realise the benefits of the GAP with urgency, and deliver the shareholder value that the company’s potential demands.”
Hein Schumacher said: “It has been a privilege to lead Unilever. We have made real progress and I am proud of what we have achieved in a short period of time. With a clear strategy, a portfolio reset in motion and a strong leadership team in place, I look forward to seeing Unilever move from strength to strength in the future.”
Fernando Fernandez said: “Being appointed as CEO of Unilever is an honour. Our focus will be on building a future-fit portfolio with an attractive growth footprint and delivering unmatched functional and perceivable superiority across our top 30 power brands.
“I have full confidence in our team’s ability to propel Unilever to a global industry-leading position and create substantial value for our shareholders. I would like to thank Hein for his values-led leadership and the performance focus he has brought to the business. I wish him every success for the future.”
An internal and external search process is being initiated to appoint a permanent CFO.
Unilever said there is no change to its 2025 outlook or the company’s medium term guidance.
Fernandez will receive fixed pay of £1.49m and be eligible to participate in an annual bonus and performance share plan awards.
Hein will continue to receive his current level of fixed pay of £1.53m up to May 31. He will then be eligible for a payment in lieu of the remainder of his notice period.
The group said he will be treated as a “good leaver” under the Remuneration Policy for the purposes of his outstanding incentives.
Russ Mould
Russ Mould, investment director at Manchester investment platform, AJ Bell, said: “It’s often easy to spot why a chief executive has left with immediate effect, such as presiding over a long period of share price weakness, profit warnings or making a transformational acquisition that proved to be a dud. In Unilever’s case, the reason for Hein Schumacher’s departure is less obvious.
“Since Schumacher joined in July 2023, underlying operating profit has increased by 15%, free cash flow has risen by a third and margins have gone up by 2.3 percentage points.
“Strategic decisions have been taken to slim down the business, with the proposed demerger of the ice cream arm. Other non-core assets are thought to be up for sale including its Vegetarian Butcher plant-based meat brand and skincare brand Kate Somerville.”
He added: “Schumacher has breathed new life into the business, making it run more efficiently and focusing on what the company does best. Under normal circumstances, the progress so far would be applauded.
“That makes his departure all the more mysterious. It suggests disagreements behind closed doors with colleagues and/or shareholders.
“Unilever’s shares have risen by nine per cent since Schumacher started as CEO, lagging the 15% return from the FTSE 100.
“Certain investors would view that as disappointing, but it’s hardly disastrous enough to warrant parting ways with the boss.
“A clue might be found in the comments from Unilever chair Ian Meakins who said Schumacher’s replacement, Fernando Fernandez, has the ability to ‘drive change at speed’ and that the board has confidence in him realising the benefits of a growth plan ‘with urgency’. That implies the board might have viewed Schumacher’s progress as being too pedestrian.
“It begs the question whether Meakins is too focused on the short term and not thinking about what’s best for the company longer term. Being too aggressive simply to get the share price moving higher is a dangerous road to travel as mistakes can easily be made.”
Mould added: “Schumacher will have completed 1.7 years in the top job for Unilever by the time he departs on 1 March. That’s considerably less than the current 5.5-year average across the FTSE 100, according to AJ Bell analysis. It means Unilever joins a growing list of companies, including gambling group Entain, where investors have been left wondering what on earth is going on.”
Unilever’s share price dropped in early trading this morning, from 4,395.00p per share to 4,341.00p, but had recovered to 4,410.00p by mid-morning.
