CEO steps down, 8 percent wiped from share value
This is not an Apple story. It concerns Anglo-Dutch multi-national Reckitt Benckiser where, on Friday, guru-like CEO Bart Becht unexpectedly announced his departure. Investors had so much confidence in Becht that the news wiped $3.4bn off the company’s stockmarket valuation. This morning, the Financial Times’ Lex column had this to say:
Whether or not some leaders really are bigger than their company is not the point. Many investors bought Reckitt shares to invest in Mr Becht and his record.
Now Reckitt is not Apple and no parallels are to be drawn. Yet Apple is another company that is linked closely with the fortunes of one man. Generalising, the FT continues:
Company boards need to be accountable for keeping investors informed about succession planning. Mr Becht’s desire to leave has undoubtedly been discussed internally for some time, yet investors had little idea of succession planning at Reckitt and are unfamiliar with Rakesh Kapoor, his successor. Given that information about new products is readily forthcoming, it is wrong that key personnel changes, which can move a company’s share price to a far greater extent, are not required to be more systematically disclosed.
Note: The author holds stock in Apple, Inc and Reckitt Benckiser Plc