Reckitt CEO departure makes it 17 FTSE 100 bosses in 2022 that have announced plans to leave

AJ Bell press comment – 1 September 2022

• Total of 17 changes announced in the top job for FTSE 100 firms in 2022 so far
• Reckitt share price drops following the departure of Laxman Narasimhan
• Despite slew of announcements, actual changes to have taken place in 2022 below average seen between 2000-2021

AJ Bell investment director Russ Mould comments:

“Investors in Reckitt Benckiser are clearly disappointed by the unexpected – and very rapid – departure of chief executive officer Laxman Narasimhan, judging by the share price slide in early trading. Mr Narasimhan cites the opportunity to take up a post in the USA after just three years in the role and the news means that FTSE 100 firms have announced 17 changes at the very top so far in 2022. Seven have already become effective, two more are due before the year end and seven more will take place in 2023, meanwhile there is no timeline available yet for the appointment of someone to take over from the retiring John Foley at M&G.

“Reckitt’s shares have not done that much during Mr. Narasimhan’s brief tenure – before today they were up 4% against a 1% gain in the FTSE 100 since 1 September 2019. However, investors had warmed to his efforts to re-establish positive momentum at the company after the ultimately failed $18 billion acquisition of Mead Johnson, legal and reputational fall-out over a humidifier disinfectant sold in South Korea and a high-profile cyber-attack, all of which bedevilled the firm during the latter stages of Rakesh Kapoor’s eight-year stint as CEO.

“Mr. Narasimhan’s motive for his departure – the prospect of a US-based post – is the same as that cited by Smith & Nephew’s Namal Nawana when he jumped ship after barely a year and a half in 2019.

“By the time of his departure at the end of month, Mr. Narasimhan will have completed just over three years in office, well below the 5.8-year average across the FTSE 100, and he is currently the sixty-seventh longest serving boss in the index.

“Three of the ten-longest serving CEOs are due to step down in 2023 – B&M European Value Retail’s Simon Arora, United Utilities’ Steve Mogford and Halma’s Andrew Williams – but overall, the number of changes that have happened in 2022 or been announced for 2023 are below the long run average of 12 to 13 changes a year.

Source: Company accounts, Regulatory News Service. *2022 and 2023 changes to date, as already announced.

“Spikes in the number of CEO changes can come when times are getting tougher, either economically or at least in terms of share price, at least if the jump in departures in 2000, 2007 and 2020 are any guide.”

Source: Company accounts, Regulatory News Service. *2022 and 2023 changes to date, as already announced.