Hunt for new Reckitt head
RAKESH KAPOOR is to step down as chief executive of consumer products giant Reckitt Benckiser after it suffered a series of setbacks.
Kapoor, 60, will retire this year after 32 with the Dettol, Durex and Nurofen group, more than eight of them as chief executive, and leaving behind “unfinished business”, according to analysts.
Despite overseeing high returns to shareholders – £100 invested in the company when he took over is now worth £251 – his bumper pay packages have stirred controversy. In 2015 he trousered £25.5million.
In recent times, his reign has been overshadowed by sluggish sales as well as a safety scandal in South Korea, a costly cyber attack, manufacturing problems at a Dutch factory and the failure of a Scholl footcare product.
The £44billion FTSE 100 firm bulked up two years ago with the £13.3billion takeover of US baby formula maker Mead Johnson Nutrition but with its finances stretched it then dropped out of the running to buy some of drugs giant Pfizer’s consumer healthcare business, which subsequently merged with that of GSK.
Kapoor also separated its health and hygiene/home products businesses into separate divisions but Reckitt’s market value has fallen by over 20 per cent in the past 18 months.
Shares fell 262p to 5990p yesterday. He said: “The last two years have been transformational and with a new decade I believe now is a good time for new leadership.”
Chairman Chris Sinclair said under Kapoor, Reckitt had been “transformed from a household cleaning business to a world leader in consumer health and hygiene”.
The board will consider both internal and external candidates.
Broker Liberum said Kapoor’s departure could “signal the start of plans to formally split the businesses into two separate entities. This could make either or both of the two businesses more attractive to prospective third parties”. Jefferies analyst Martin Deboo said: “Kapoor has given, to our eyes, consistent signals of wanting to see through and sort out Reckitt’s commercial delivery, its separation project and the integration of Mead Johnson. So there is a sense of unfinished business to us and also one of mounting constraints around the hitherto mighty Reckitt machine.”