Longtime Head of Lysol Maker Reckitt Benckiser to Resign -- WSJ
January 17 2019 - 03:02AM
Dow Jones News
By Saabira Chaudhuri
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 17, 2019).
LONDON -- Reckitt Benckiser Group PLC's chief executive, Rakesh
Kapoor, will step down at the end of 2019 after eight years leading
the owner of the Durex and Lysol brands.
The consumer-goods company, whose other offerings include 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. Also, confronted by protests in South Korea, it had to
apologize for a humidifier disinfectant that killed more than 100
people.
During Mr. Kapoor's tenure, Reckitt's share price has
outperformed the European consumer-staples sector by 9%, but over
the last three years underperformed it 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 ample profit margins, reflecting a laser focus on
costs and products like fast-acting painkillers and dishwasher
tablets that 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 narrowing 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.
In recent years, his pay declined as long-term incentives lost
value amid the company's weak performance.
The India-born Mr. Kapoor, who has been with the company for
more than 30 years, 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 17, 2019 02:47 ET (07:47 GMT)
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