Yahoo Finance Live anchors discuss Unilever CEO Alan Jope’s decision to retire next year.
BRIAN SOZZI: Welcome back. It could be another rough day for the markets, as traders assess volatile moves in the pound and further rate hike fears. And with that as a negative backdrop, let's lock in a few key stocks for today.
Shares of Unilever moving in the premarket, after the company announced that CEO Alan Jope plans to retire at the end of next year. And Brad, this comes as Jope has really has been under fire from activist investor Nelson Peltz. Now, Peltz got a board seat at Unilever in July. So theoretically, he's been digging in his heels here and better understanding the company.
Now, this is the same executive, in Nelson Peltz, that drove a major shake-up in P&G. Didn't really see management change there, per se. But you did see a restructuring of how that business operates.
Now, Unilever telling Yahoo Finance in a statement that Jope is not being pushed out by Peltz. And now Trian also telling Yahoo Finance they were sorry to learn of Jope's decision to retire as CEO of Unilever at the end of 2023.
I get it. Unilever is not gonna come out and say, yeah, our CEO is leaving because this activist investor came in here and put-- what usually happens, this is what happens. The CEO has not been getting it done. You have the stock down 16% since he started as CEO, January 1, 2019.
Procter Gamble up 47% over the same time. S&P 500 up 48%. He is not getting the job done. Peltz probably said, look, guys, well, let's just save a little face here. You can stay on for an extra year. Help me figure out what to do with this company. And then you can piece out and collect your golden parachute.
BRAD SMITH: Yeah, the company is saying that the board is going to proceed with a formal search for a successor, considering both internal and external candidates. But the timing around this is really critical because this is a time period, especially when you're monitoring the pullback in some of the consumer discretionary dollars that are being spent, where those dollars actually lean towards. And it's something that we talk about all the time in these little luxuries.
And Unilever is, as they've talked about in their most recent earnings period, well-positioned across beauty and well-being, personal care. All those self-care Saturdays that we're having now-- I know you spend, like, five hours in the gym--
BRIAN SOZZI: I do. I do.
BRAD SMITH: --on Saturdays. That's a self-care Saturday--
BRIAN SOZZI: Interesting.
BRAD SMITH: --right there. And it looks different for everybody. But Unilever and some of the brands, that particularly just dovetails right into-- Dove, pun intended, I guess, I suppose, with that being one of their brands-- but dovetails into what the consumer environment looks like and how Unilever can actually navigate that and some of the positioning that they continue to lean into.
BRIAN SOZZI: Super simple analysis here. And I'm sure Peltz is going through it as well. Why is Unilever still selling Hellmann's mayonnaise and I believe Dove chocolate bars alongside of all these personal care products? It no longer makes sense. So I think we are gonna see from Peltz, he's gonna run the same playbook he ran at P&G. And you'll see Unilever, perhaps, get rid of some of these divisions.
And it's not just Unilever. I look at a company like Clorox. Why is a company selling bleach also still selling Hidden Valley Ranch dressing? It doesn't make sense. Maybe it made sense 10 years ago. It no longer makes sense in this environment.
BRAD SMITH: Well, it's a byproduct of which brands you home grow and which ones you actually just go on an acquisition spree of over the years, too. And we've seen so many of those within some of the consumer packaged goods.
But especially for a company like Unilever, they've got this new organizational structure that they were trying to really lay out to investors across in five kind of pillars-- beauty and well-being, personal care, home care, nutrition, and ice cream being its own category. That would be a fun business. I mean, can you imagine saying, yeah, I'm the CEO of the ice cream division over at Unilever. Like, awesome.
But going forward, I think it really is across the different inflationary environments where they're still trying to vie for those consumer dollars. Where is the consumer buying it in a, perhaps, BJ's or Costco versus buying it on a one-off basis, because of either being comfortable getting it at a better unit price or being able to say-- or only being able to say, I can only really get one of these to feel like I've had a luxury experience today.
BRIAN SOZZI: It's a good point. And you know, also I'm just feeling a little sentimental today, probably carrying on for the rest of the week. But Alan Jope has spent over 35 years--
BRAD SMITH: Yeah.
BRIAN SOZZI: --at Unilever. He gets-- finally, he has worked his butt off his entire career. Finally, reaches the C-suite. Gets that brass ring. Starts as CEO January 2019. And he's being unceremoniously just heaved out the door by an activist investor, which back in the day would be called a greenmailer.
So it just it stinks. Like, you work your whole life to get to this point and get shown the door. But look, Jope didn't get it done. Stock prices stinks. The company is still operating too many companies, has to be split off. He hasn't gotten the job done. So time for him to retire, go to the beach, and maybe become a consultant.
BRAD SMITH: All right, well, maybe he'll take one of these other brands with him to the beach as well.
BRIAN SOZZI: [CHUCKLES] Maybe Hellmann's mayonnaise.
BRAD SMITH: Maybe some Dove. Maybe some Dove.
BRIAN SOZZI: Why he's still offering [INAUDIBLE].