Reckitt CEO to Step Down at Year's End
January 16 2019 - 4:56AM
Dow Jones News
By Saabira Chaudhuri
LONDON -- Reckitt Benckiser Group PLC's Chief Executive Rakesh
Kapoor will step down at the end of 2019 after eight years at the
helm of the Durex and Lysol owner.
The consumer-goods company, which also owns brands like Air Wick
fresheners and Dettol cleaning products, said Wednesday it has
started its search for a successor and will consider both internal
and external candidates.
Mr. Kapoor, who has led the British company since 2011, is
credited with pushing Reckitt deeper into higher-margin
consumer-health products and away from slower-growing packaged
food.
But after a period of strong growth Mr. Kapoor has more recently
presided over a string of disappointing results. The company was
hit by cyberattacks, failed innovations and manufacturing
disruptions. It also was hit by protests in South Korea over a
humidifier disinfectant that killed people, for which it
apologized.
During his tenure, Reckitt's share price outperformed the
European consumer staples sector by 9%, but over the last three
years underperformed by 13% according to RBC, an investment bank.
In early trading on Wednesday the stock was down 1.8%.
Reckitt for years was seen as a shining example of how a
consumer-goods company should operate. It consistently delivered
strong sales and also good profit margins, enabled by its laser
focus on costs and exposure to products like fast-acting
painkillers and dishwasher tablets consumers are willing to pay
more money for.
However, its performance -- and low-cost model -- has been
questioned more recently amid high turnover among senior
executives, volatile sales growth and lower margins.
As growth slowed, Mr. Kapoor tried to spark sales with a 2017
deal to buy baby-food maker Mead Johnson Nutrition Co. for $16.6
billion and a restructuring that split the company into two
divisions, consumer health and home and hygiene, the former of
which he headed directly.
Mr. Kapoor, one of Britain's highest paid executives, attracted
controversy with his salary particularly after sales began to drop
although in recent years that pay declined as his long-term
incentives lost value amid weak performance.
The India-born Mr. Kapoor, a company lifer, is known for his
down-to-earth style of interacting with investors, speaking about
the merits of Reckitt's new sex products and women's tights and
painkillers with equal equanimity.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
January 16, 2019 04:41 ET (09:41 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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