Look! who succeeds Jope as Unilever CEO

In 2016, Alan Jope did an energetic workout with the host of the “Spartan UP!” motivational podcast series, at one point even doing burpees. But the longtime Unilever Plc executive turned out to be less of a corporate action man.
The maker of Marmite and Magnum ice cream said that Jope would retire at the end of next year. The company now has an opportunity to bring in an external chief executive officer — and finally split the company’s food and non-food operations.
Unilever has underperformed since Jope succeeded Paul Polman in January 2019. The shares have delivered a total return of 13% since his arrival, whereas rival Nestle SA has generated a total return of about 45% in the same period. Unilever shares rose almost 4% on Monday before falling back slightly.
Earlier this year, activist investor Nelson Peltz’s Trian Fund Management built a stake in Unilever, and in July, Peltz joined the Unilever board. Trian said in a statement that it was “sorry to learn of Alan Jope’s decision to retire,” and that Peltz looked forward to being part of the recruitment process.
Jope set in train a difficult tenure by not ditching a target to deliver a 20% operating margin by 2020 as soon as he took on the role. The goal was put in place after Kraft Heinz Co.’s short-lived siege in February 2017, when it tried to buy the company for $143 billion. Hanging onto the target meant Unilever was constrained when it needed to turbo-charge sales growth — something that eluded Jope, despite the company generating almost 60% of sales from faster-expanding emerging markets.
He also came under fire for his focus on social purpose. Expecting Hellmann’s mayonnaise and PG Tips to do more than flavor sandwiches and make tea was supposed to encourage younger shoppers to pay more for the Unilever products. Although that may be an effective marketing strategy, poor communication left the company open to criticism from fund manager and major shareholder Terry Smith.
More investor concern came in January over Unilever’s 50 billion-pound ($54.6 billion) proposed bid for GSK’s consumer arm, now listed as Haleon Plc. Shareholders were unconvinced by the strategy, the price and whether management could make the deal work.
To make matters worse, Mark Schneider, Nestle’s CEO, has made a series of canny disposals and successful deals, such as acquiring Starbucks Corp.’s products sold in supermarkets for $7 billion in 2018.
Given Unilever’s lackluster performance, the board should appoint an external CEO. Dave Lewis, who led Tesco between 2014 and 2020, was mooted as a candidate for the role before Jope was appointed. He is now chairman of Haleon. He still has a strong following among investors, so Unilever could try to persuade him to move back to an executive role.
Another option would be to resurrect the idea of a deal with Haleon, with Lewis leading the enlarged group. The combination wasn’t completely without merit. It would have married Haleon’s strong consumer brands, such as Panadol painkillers and Sensodyne toothpaste, with Unilever’s portfolio, including Dove and Vaseline.

—Bloomberg