PZ Cussons withholds retirement payments to former CEO

Alex Kanellis

Consumer products group PZ Cussons has withheld payments to former chief executive Alex Kanellis after an internal investigation.

The Manchester-based group announced on December 12, 2019, that Mr Kanellis would retire, on January 31, 2020.

However, it said following the announcement, certain matters were brought to the attention of the company.

These related to a number of cash withdrawals and payments made by Mr Kanellis over a period of years.

These actions had not previously been disclosed to the board and, if substantiated, indicated behaviours inconsistent with what would be expected of a senior member of management, the company said.

It revealed that, as soon as it became aware of the alleged activities, the board immediately initiated an independent investigation, led by external law firm Addleshaw Goddard, which is now complete.

A report has been presented to, and considered by, the PZ Cussons board.

The board is now in a position to conclude that Mr Kanellis’ conduct fell short of that which could reasonably be expected from the chief executive officer and constituted repeated breaches of his duties as a director of the company.

In a statement to the Stock Exchange this morning, the company said that the board is satisfied that the financial amounts involved are not material in the context of the group and that there is no impact on, or requirement to restate, the financial statements for the current or any prior periods.

During the period of the investigation, Mr Kanellis – who had, in the meantime, been placed on garden leave – retired, as previously announced.

The settlement agreement between the company and Mr Kanellis dated December 11, 2019, required certain representations to be reconfirmed by Mr Kanellis before payments due upon his retirement could be made.

The Cussons statement said: “As a result of facts coming to light as part of this investigation, the board believes that Mr Kanellis could not, in the circumstances, reconfirm those representations.

“As a consequence, the remuneration committee has determined that no payments will be made directly to Mr Kanellis in connection with his retirement.”

Following the investigation, the group said that, as part of good governance, the board has instructed a firm of independent accountants to perform a review of controls and compliance, focusing on specific areas highlighted by Addleshaw Goddard’s report.

“This external review, and the board’s prompt actions in dealing with these conduct issues as soon as they were brought to its attention, emphasise the critical importance that the board attaches to appropriate conduct across the entire group,” the statement concluded.