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British chief executives may not command the pay cheques of football managers. But Unilever’s precipitous ousting of Hein Schumacher shows they can have equally short shelf lives.
Schumacher, only the second outsider to helm the consumer goods conglomerate since it ditched co-heads, was in the throes of steering Unilever’s latest turnaround. Now, he will be out at the end of the week, replaced by chief financial officer Fernando Fernandez.
What works on the pitch is messier in the C-suite. Unilever has 128,000 staff spread across 190 countries and an unwieldy business that is being gradually pruned. Investors, including US activist Nelson Peltz, are losing patience with Unilever’s performance. Justifiably so: it lags behind peers such as the US’s Procter & Gamble on margins and sales growth.
But shortened tenures are unhelpful. About 20 months is hardly sufficient to turn round a longtime laggard. Sure, Schumacher’s self-styled growth action plan could have garnered a bit more momentum. Plans to separate the ice-cream business, unveiled last March, stalled when would-be buyers balked; a spin-off on the Amsterdam exchange is now planned for later this year. But break-ups take time: US conglomerate General Electric took two years to dismantle itself; rival Honeywell has set a similar timetable.
Performance, more easily assessed in league tables, is a trickier metric for companies. Schumacher had presided over a 9 per cent rise in the share price and the best set of results in a decade. But Unilever shares have long trailed behind its peer group and continue to do so.
The abrupt nature of the announcement suggests impatience within. Peltz, who joined the board in 2022, is a man after action. Chair Ian Meakins, who has headed a dozen or so companies, has a reputation for moving fast. He was quick to wield the axe — to directors and business units — after taking up the helm at Wolseley in 2011, promising investors that the building materials merchant “won’t dally too long”.
Presumably too, the board felt that an outsider, like a management consultant, was just the ticket for laying out a blueprint for change, but that execution was best left to a dyed-in-the-wool Unilever man. Fernandez, as former finance chief, now gets to share in Schumacher’s achievements but disclaim his flaws.
Consumer goods is, at heart, an industry that hews to homegrown talent, despite its reliance on constant innovation. Only last year Switzerland’s Nestlé installed company veteran Laurent Freixe at the top, replacing external hire Mark Schneider. It falls to Fernandez, now tasked with conducting the planned 7,500 job cuts and launching the ice cream spin-off, to prove himself a better choice to lead the team.
louise.lucas@ft.com
