- Push-out Score suggests push-out forces
- After less than one year in the position
- Thanks for Butterworth
- Hari Nair taking over in the interim
- Search for a successor
(exechange) — London, United Kingdom, October 5, 2018 — Liam Butterworth, chief executive of Delphi Technologies, leaves. It is an abrupt change. As announced by Delphi Technologies PLC in a news release and in a regulatory filing published on Friday, October 5, 2018, Liam Butterworth leaves his post as Chief Executive Officer at the maker of vehicle propulsion systems after less than one year in the role, effective immediately.
No company wants a CEO to flame out in the first year.
Delphi Technologies will undertake a search for a successor.
Butterworth’s duties will be taken over in the interim by Hari N. Nair, a former Chief Operating Officer of Tenneco Inc., as interim Chief Executive Officer.
Already a director
Nair is already a director of Delphi Technologies. Often a board member is a last resort, someone who is turned to in desperation when a company cannot find suitable candidates. On the other hand, directors-turned-executives represent a blend of outsider and insider.
They don’t have the constraints of a pure insider when it comes to leading painful changes or making unpopular decisions, and they have more company knowledge than a pure outsider.
Having been a director, Nair understands the expectations and dynamics of the board and has knowledge of Delphi Technologies’s organization, risk-management practices and strategy.
“To pursue other interests”
Butterworth’s sudden departure from the CEO post is explained as follows. Delphi Technologies said: “Nair succeeds Liam Butterworth who is stepping down from his role as President and Chief Executive Officer to pursue other interests.”
The phrase “to pursue other interests” opens the door to speculation.
Precise information about Butterworth’s future plans was not immediately available.
Generally speaking, it is often an alarm signal for stockholders when a CEO leaves the post abruptly and without a reasonable explanation.
Delphi Technologies said: “On October 1, 2018, Liam Butterworth informed Delphi Technologies PLC … that he was resigning his positions as President and Chief Executive Officer and a director to pursue other interests. The Company’s Board of Directors accepted Mr. Butterworth’s notice, and on October 4, 2018 elected to exercise the Company’s right to pay Mr. Butterworth six month’s base salary in lieu of the required notice period. The Company anticipates that Mr. Butterworth’s last day of employment will be on or about October 5, 2018.”
Share price decline
The change follows a decline in the share price of Delphi Technologies PLC since June 2018.
Chaired by Timothy M. Manganello
Delphi Technologies PLC is chaired by Timothy M. Manganello.
Timothy M. Manganello has been non-executive Chairman of the board of directors for Delphi Technologies PLC since December 2017. Manganello retired as Chief Executive Officer of BorgWarner Inc., a global automotive supplier, in 2012, and retired as Executive Chairman of the Board of BorgWarner in 2013.
In the position of CEO since 2017
Butterworth became Delphi Technologies President and Chief Executive Officer at the Spin-Off.
On December 5, 2017, Delphi Technologies became a $4.5 billion independent company trading on the New York Stock Exchange.
Prior to the Spin-Off, Butterworth served as senior vice president of Delphi Automotive PLC and president, Powertrain Systems from February 2014 and assumed responsibilities for Delphi Product & Service Solutions in September 2015.
He previously was president of Delphi Connection Systems, a product business unit of Delphi Automotive PLC, from October 2012.
He joined Delphi Automotive PLC in 2012 after the company acquired FCI Holding SAS’s (“FCI’s”) Motorized Vehicles Division, where he had been president and general manager from 2009 through the acquisition.
He joined FCI in 2000 and held positions in sales, marketing, purchasing and general management.
Prior to FCI, Butterworth worked for Lucas Industries and TRW Automotive.
He holds a master’s degree in business administration from Lancaster University in England.
At the time of his appointment as Chief Executive Officer at Delphi Technologies, Butterworth had said: “We are extremely well positioned to assist our customers worldwide to meet increasing regulatory demands around fuel economy and emissions. We are paving the way towards full electrification with our comprehensive technology portfolio, best-in-class cost structure and a balanced geographic manufacturing footprint with 20 manufacturing facilities and 12 technical centers on three continents. Despite recent debates around the future of the internal combustion engine, market experts predict that around 95 percent of vehicles on the road will still have an engine in 2025, albeit with increasing degrees of electrification. This means we have the opportunity to make significant step changes in vehicle performance on the way to a fully electric market. We continue to innovate in this space, which will include electrified vehicles with both gas and electric systems such as mild and full hybrid solutions. Our focus on vehicle performance in these areas carries over into our aftermarket business, as it will play an important role in supporting vehicle repairs to maintain these future regulations. The aftermarket team will have unique access to the engineering teams creating this technology, which will give them a distinct marketplace advantage.”
Generally speaking, when a top manager announces to step down with no permanent successor in place, it is a signal that the move was unexpected and too early.
Push-out Score suggests push-out forces
It is not completely certain what forces eventually triggered Liam Butterworth’s sudden move.
The Push-out Score™ determined by exechange suggests that push-out forces may have contributed to the change.
Read the full story in the exechange report 41.2018 ($).