Unilever CEO to retire at 2023

Unilever said CEO Alan Jope would retire at the end of 2023, a move that was less than a year after a bungled attempt to buy GSK's consumer healthcare business, and two months after activist investor Nelson Peltz joined the board.

A British consumer products maker said its board would begin a formal search for a successor to Jope, a Unilever veteran who took over his role at the beginning of 2019 and considered both internal and external candidates.

Unilever's shares rose almost 4% in early trading, hitting their highest since August last year. They were up 1.2% at 1150 GMT.

The company's search begins at a time of soaring food and energy prices that are hurting consumer confidence and hurting household budgets. The company will be looking for a new CEO at the same time as rival Reckitt, maker of Dettol products and Finish dish soap.

The move was met with disapproval from shareholders, who have criticised Unilever for promoting sustainability over core growth, despite the fact that Unilever had three bids for the consumer health arm of GlaxoSmithKline, one for as much as 50 billion pounds $53.14 billion.

This may signal more welcome future change at Unilever, said Tineke Frikee, fund manager at Unilever's Waverton Asset Management.

The unappealing plan to buy consumer healthcare from GlaxoSmithKline has tainted Mr Jope's track record so a fresh start from a new CEO could convince investors that Unilever's momentum is heading upwards again. In January, the company announced plans to cut about 1,500 management jobs and revamp its business to focus on five main product areas, days after it was announced that Peltz, via his Trian Partners vehicle, had a stake in Unilever.

Trian told Reuters in a statement that it was sorry to learn of Jope's decision to retire.

As a board member, Nelson Peltz looks forward to working closely with Alan until his departure and to being part of the process of choosing a new leader for the company, according to Trian.

A Unilever spokeswoman said the company is fully committed to the organisational changes and that Jope is committed to delivering against that strategy. Jope has been with Unilever for more than 35 years, holding various senior leadership positions, including being head of the personal care division from 2014 onwards.

Jack Martin, fund manager at Unilever shareholder Oberon Investments said that Jope's tenure as CEO was a bit of a mixed bag. It has been a very impressive career, joining as a trainee in the 80s and ending up as CEO of one of the UK s largest listed companies. Unilever's shares have underperformed European consumer staples and discretionary indices, as well as most rivals since Jope became CEO.

The immediate concern is that this leaves 15 months until his retirement with a CEO who might lose credibility with employees and other stakeholders, RBC analyst James Edwardes Jones said.

This is a time when Unilever will be implementing and bedding down a fundamental reorganisation, not to mention dealing with a challenging macroeconomic environment. Unilever's unusual decision to tell the market more than a year before Jope leaves stems from concerns that the news would have leaked before being officially announced, according to a source familiar with the matter.

Although his career has been great, investors are likely to see this as a positive change, as the company has struggled to convince investors that it has the right brands and strategy to be a mid-single digit growth company, according to Bernstein analyst Bruno Monteyne.