Unilever CFO Leaving After Less than One Year of New CEO in Place

Jim Lawrence, Unilever’s UL (NYSE) CFO is leaving the company. Lawrence, who was appointed CFO back in August of 2007, has chosen to resign his position. He leaves the job less than a year after CEO Paul Polman was put in place. Lawrence is one of many changes that have occurred in the executive ranks since Polman took the reigns of the firm. According to a story by Clementine Fletcher and Jeroen Molenaar for Bloomberg,

Lawrence, 57, chose to resign and won’t receive severance pay when he leaves at the end of 2009, spokesman Flip Dotsch said. The executive will keep his “significant” stake in Unilever, Dotsch said. His holding is worth about 14 million euros ($21 million), data compiled by Bloomberg shows.

Speculation has been around that Lawrence had hoped to get the CEO position. Whatever the reason, Polman has been making real strides to the company back on track to compete more effectively with its key rival Proctor & Gamble.The Bloomberg reporters went on to write,

The first reason for the departure is “probably personal, the second is probably because he wants to become a CEO,” said Marco Gulpers, an analyst at ING Groep NV in Amsterdam with a “buy” on the stock. “They go their separate ways in harmony, as I understand. I think his successor will be an outsider.”

Keep a close eye on who Unilever selects to replace Lawrence and also where he ends up and what he ends up doing.

For more:

Reuters

Times Online

CEO Watch- Jeffrey Peek, CIT

Jeffrey Peek, CIT’s CIT (NYSE) CEO since 2003 appears to have entered a status similar to many of the financial CEOs that were forced out during the financial crisis over the last year and a half, e.g., Stanley O’Neal of Merrill, Sir Fred Goodwin, Royal Bank of Scotland, Martin Sullivan, AIG … CIT has been in free fall of late and is looking to the government for help. It is unlikely Peek will remain as CEO after the company’s crisis manages to come under control. According to a story by Paul Tharp in the New York Post,

The White House is “in advanced talks” trying to extinguish a sudden financial wildfire that could swallow CIT Group, the financial firm that bankrolls the nation’s small businesses.

… The company, which reported more than $3 billion of losses in the past eight quarters, said it hired Skadden, Arps as an adviser. Skadden is known for its work in mergers and acquisitions and bankruptcies.

CIT warned yesterday in internal documents that it’s in danger of running out of cash unless it can get a second round of federal bailout help like that of Wall Street’s banks and other cash-strapped financial firms.

Peek can be expected after the crisis is handled to find himself a lightning rod for the company’s risky business decisions. Keep a close eye on how Peek handles the current crisis and how he is ultimately portrayed by institutional investors and the government. In a story by Ari Levy and Linda Shen of Bloomberg they examine the difficulties Peek and CIT are facing. The writers quote Sean Egan, president of Egan-Jones Ratings Co. in Haverford Pennsylvania,

“You could make a cogent argument that senior management didn’t have a good grasp of the financial storm that was on the horizon,” … “CIT has been through a number of near-death experiences. This time they cut it too close.”

The Bloomberg reporters go on to say,

… On Peek’s watch, the shares soared to a record $61.59 in February 2007 before plunging 98 percent as the company reported eight straight money-losing quarters. CIT’s debt rating was cut by Standard & Poor’s yesterday to seven levels below investment grade, as the ratings firm cited company requests to draw down on credit lines.

Moody’s also slashed its rating yesterday, to B3 from Ba2, or six levels below investment grade, because of “inadequate progress” toward improving liquidity. CIT, which lends to 950,000 businesses, warned that a collapse would put manufacturing and retail clients at risk.

It is only a matter of time for Peek.

For more:

Financial Times (update July 16)

New York Times (update July16)

Recommended Reading - Banker Pay May Escape Obama Caps As Wall Street Eyes Guidelines, Bloomberg

Christine Harper, Pat Wechsler and Matthew Benjamin wrote a piece today for Bloomberg examining the possibility that the Obama administration may relax the compensation restrictions on the banks that have received TARP money. The restrictions were imposed by Congress after Merrill Lynch executives had received bonuses while the company was floundering and already under purchase from Bank of America. The story quotes Gary Parr, the deputy chairman of Lazard Ltd.,

“It is clear that the government’s going to have to come out with some guidelines on what will compensation be at the big institutions that have TARP,” … “There’s going to need to be something done so that there isn’t a picking off of certain institutions where they’re at a severe disadvantage to others.”

The authors of the story also referred to research by Liberum on turnover in the financial industry and how those numbers might impact Congress’ view on the compensation question. Check out the story if you are interested in executive compensation or the government bailout of the financial industry.

CEO Watch - Ed Zander, Motorola Remains A Survivor

Ville Heiskanen in a Bloomberg article today examined embattled, but so far triumphant, CEO of Motorola, Edward Zander. Zander after an uncertain battle has managed to survive Carl Icahn's attempts to get him out. According to Heiskanen, Zander has actually developed some breathing room for his position and for Motorola MOT (NYSE). Zander's changes in management and the launch of the newest Razr phones were portrayed as successful in the article. It is interesting when you consider many of the negative reviews of Motorola's newest Razr phones as well as experts assessment of Zander's management changes and management of the company.

I would not declare victory yet, if I were Zander. Stay tuned.

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