By the numbers: CEO change number 13 in consumer goods industry

  • Bumpy exit at Reckitt Benckiser
  • Push-out Score of 6 indicates forced move

The wave of CEO changes in the consumer goods industry is rolling.

In the past 12 months, 12 global heavyweights have announced a leadership change: Unilever NV, Coty Inc., Kimberly-Clark Corp., Constellation Brands Inc., British American Tobacco Plc, Tyson Foods Inc., PepsiCo Inc., Dunkin’ Brands Group Inc., Beiersdorf AG, Brown-Forman Corp., Campbell Soup Co. and Altria Group Inc.

Here comes number 13: Reckitt Benckiser Group Plc.

Rakesh Kapoor retires as CEO by the end of 2019.

The Push-out Score of 6, determined by the research firm exechange, indicates a forced exit.

On the surface, it looks like a voluntary move.

At 60, Kapoor is close to the normal retirement age. His tenure of approximately eight years is reasonable. The lead time of up to one year is generous, and in the departure announcement of January 16, 2019, he receives praise and thanks.

However, the analysis model shows six red flags, suggesting a forced departure.

First of all, the reason Kapoor gives for his move seems threadbare. He states: “2020 will herald a new decade and I believe now is a good time for new leadership to take this great company through the next phase of outperformance.” Precise information regarding his future plans was not immediately available.

Second, the share has lost around 22 percent of its value since May 2017.

Third, the CEO leaves in difficult times. Reckitt Benckiser has faced a number of problems in recent years, including a cyber attack, a safety scandal in South Korea and a temporary baby milk factory shutdown in the Netherlands.

Fourth, the company has yet to find a successor.

Fifth and sixth, the form and language of the brief announcement provide two further warning signals. Chris Sinclair, who has only served as Chairman for nine months, refrains from praising the outgoing CEO for concrete and quantified successes or from regretting his departure.

Sinclair was CEO of toy manufacturer Mattel Inc. until 2017 and therefore knows first hand about the current problems of consumer goods companies. He is also aware of how difficult it is to find the right person at the top. His successor at Mattel, Margo Georgiadis, was already on the move again after about a year as CEO.