Reckitt boss bows out with £116million
Rakesh Kapoor to retire after 32 years at firm
tHe boss of reckitt Benckiser could trouser £30m after leaving – on top of the £86m he was paid while in charge.
rakesh Kapoor, one of the Ftse 100’s best-paid chief executives, will retire by the end of 2019 after 32 years at the company, including more than eight in charge.
the 60-year-old was hailed for a 90pc surge in shares during his time at the top and for masterminding a major overhaul of the business, which is behind brands such as Dettol, Cillit Bang and Durex.
But Kapoor also leaves after a period of slow sales growth, several business disasters and rows over fat cat pay.
During the past three years the firm has been hit by disruption at its Dutch factory, product failures, an exodus of bosses, a cyber-attack costing £100m and a scandal in south Korea that saw one of reckitt’s disinfectants blamed for the deaths of children.
Kapoor’s huge payouts have also sparked investor anger, with nearly a quarter of shareholders opposing his £25.5m package in 2015 at a company meeting.
Between 2011 and 2017 he pocketed £85.7m in pay, bonuses and perks.
His pay for 2018 has yet to be revealed and he will continue to be paid until he leaves this year – landing him another large cheque.
He could also be handed 490,000 reckitt shares, which are worth £30m at current prices, depending on performance.
that would take his pay since becoming chief executive to a staggering £116m, not including his earnings in 2018 and 2019.
Luke Hildyard, director of the High Pay Centre, said: ‘Current levels of executive pay are generally considered to be excessive, but even by those standards the payouts at reckitt have been extraordinarily brazen. there’s no real basis for thinking the company’s performance would have been any different had they paid a less outlandish amount.’
Kapoor yesterday sought to set out his legacy at reckitt, highlighting a £13bn takeover of Mead Johnson two years ago and moves to divide it into two divisions, one for health and another for hygiene and household goods.
However, his bid to add Pfizer’s consumer health business to reckitt’s portfolio failed.
Kapoor said: ‘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. i will remain fully focused on driving the business until a successor is in place.’
Kapoor had his pay cut twice in the past two years due to performance and investor anger over his £25.5m payout. He could get another 900,000 share options, in addition to the 490,000 linked to performance, although those are worthless at the current share price due to exercise costs. His departure comes amid turmoil in the consumer goods industry, with rivals Unilever, Campbell soup and Pepsico naming new bosses in the past six months.
reckitt is seeking a successor and will look at inside and outside candidates, with hygiene division president rob de Groot a contender. Chris sinclair, reckitt’s chairman, said: ‘Under rakesh, reckitt has been transformed from a household cleaning business to a world leader in consumer health and hygiene. He has been both the visionary and the architect behind this strategic portfolio transformation.’
shares in reckitt dipped by 4.2pc yesterday.
Liberum analyst robert Waldschmidt said: ‘We expect Kapoor’s departure could signal the start of plans to formally split the businesses into two separate entities.’ analysts at Jefferies said: ‘the announcement compounds our sense of unease around reckitt, a feeling that the success model is finding its limits and that the loss of Pfizer has been a mortal blow.’