Unilever has ditched its chief executive less than two years after he took the job. In a move that stunned the City, the consumer goods giant said Hein Schumacher will be replaced at the end of the week by finance chief Fernando Fernandez. The defenestration of the Dutchman – who only took over in July 2023 – left analysts ‘gobsmacked’ and shares in the FTSE 100 group fell more than 3 per cent in early trading.
The dramatic shake-up – decided at a board meeting on Monday – came as directors bet Fernandez can turn the Marmite and Magnum maker around more quickly. Chairman Ian Meakins thanked Schumacher for ‘resetting Unilever’s strategy’ and his moves to spin-off the ice cream business behind brands including Magnum, Cornetto and Ben & Jerry’s.
But he went on to say how ‘impressed’ the board was with Fernandez’s ‘decisive and results-oriented approach and his ability to drive change at speed’. Magnum force: Model Kendall Jenner makes her own ice-cream in a promotional event in Cannes, France.
Meakins hailed the new boss’s ‘profound knowledge of Unilever’s operations’ – Fernandez has been at the firm for 37 years – and added: ‘While the board is pleased with Unilever’s performance in 2024, there is much further to go to deliver best-in-class results.’.
The company, whose brands also include Dove, Hellmann’s, Domestos and Knorr, said the succession was made ‘by mutual agreement’ with 53-year-old Schumacher. But Russ Mould, investment director at AJ Bell, said the sudden change ‘suggests disagreements behind closed doors’, adding: ‘The board might have viewed Schumacher’s progress as being too pedestrian.’.
In an email to staff, Schumacher said: ‘I regret leaving Unilever earlier than anticipated. I stand by my record and approach.’. When he took over the business in 2023, he embarked on a major restructuring programme that included cost-cutting, the spin-off of the ice cream business and a renewed focus on its most successful brands.
London suffered a major setback earlier this month, however, when Unilever said the ice cream arm would have its main stock market listing in Amsterdam. Schumacher also shifted Unilever away from the ‘woke’ agenda pursued by predecessor Alan Jope that saw the company widely mocked for attempting to imbue its brands with social purpose.
But Unilever shares rose less than 10 per cent on his watch – worrying board members who were anxious to see faster change. The company has also been under pressure from investors, including US activist Nelson Peltz, who sits on the board and is one of Unilever’s largest shareholders through is firm Trian Partners. Schumacher was considered to have been Peltz’s pick for the job.
Analysts at Barclays said that Fernandez was the ‘right choice’. But the speed of Schumacher’s exit caught many off-guard. ‘We certainly didn’t see this coming,’ said James Edwardes Jones at RBC Capital Markets, who said he was ‘gobsmacked’ by the decision.
‘We wonder whether this is a victory for those Unilever insiders who resented the appointment of an external chief executive and evidence of the old – and often dysfunctional – Unilever culture reasserting itself.’. New Unilever boss Fernando Fernandez could earn close to £11million a year having taken the job after nearly four decades at the company.
Born and raised in Argentina, he joined the consumer goods giant as an analyst in his home country in late 1987. Then, he took on senior roles including executive vice president of the Latin American business before heading up the beauty and wellbeing arm. He was made chief financial officer in January and will take the top job on Saturday.
But he will take a small pay cut compared to Hein Schumacher. He will receive a base salary of £1.5million before bonuses and share awards, slightly lower than his predecessor’s fixed pay of £1.53million. Under the pay plan, he will also be eligible for an annual bonus worth up to £3.4million and share awards of up to £6million.
Jefferies analyst David Hayes said some may see his style as ‘somewhat maverick’. Bernstein analyst Callum Elliott added that Fernandez’s ‘fiery, charismatic’ manner was ‘somewhat unusual’ compared to the ‘understated’ manner of Schumacher.
