New Vodafone chairman brings emerging markets focus
LONDON (Reuters) - Vodafone has named outgoing Philips Chief Executive Gerard Kleisterlee as its new chairman, bringing emerging markets know-how and an ability to simplify a group to the world's largest mobile operator.
Kleisterlee, who has spent his entire career at Philips, will take over from John Bond at Vodafone's annual general meeting later this year, 12 months after Bond endured a small rebellion over his role in the firm's strategy.
German-born Kleisterlee, who transformed and simplified the previously unwieldy Philips conglomerate after taking over as chief executive in 2001, will face challenges in Vodafone's emerging markets such as India, where it is grappling with fierce competition and new regulations.
Like all mobile operators, Vodafone is also struggling in its more mature markets, where competition and regulation have pushed prices lower. It is also nearing the end-game on its difficult standoff with U.S. joint-venture partner Verizon over when a dividend will be paid.
"His track record is very good," Execution Noble analyst Will Draper told Reuters.
"He's combined a good strategic repositioning at Philips with a really good operational performance and quite clever, selective M&A where required. But he's not a gung-ho dealmaker at all. It's been incremental and about the need to reposition the group."
Bond, a former Chief Executive and Chairman of HSBC, said the appointment followed a process that began in February last year, before the AGM rebellion.
"I am delighted to announce that Gerard Kleisterlee, a highly successful international businessman whose track record at Philips speaks for itself, will be succeeding me as chairman after my six years on the board of Vodafone," he said.
More than 6 percent of Vodafone shareholders voted against the re-election of Bond at the company's last AGM in protest at what they deemed to be a poor strategy that hurt the firm's value.
Since then, the group has sold assets in China and Japan and is close to selling its stake in France and possibly Poland, returning cash to shareholders and boosting its stock.
The protest was led by the Ontario Teachers' Pension Plan (OTPP), which held 0.4 percent of the stock and went public with its concerns that the group was guilty of "significant structural and strategic weaknesses."
Vodafone said on Wednesday, however, that the share price had jumped from 115.6 pence in July 2006, when Bond became chairman, to 177 pence at the close of business on Tuesday. Its stock was up 0.6 percent at 178.05 pence in mid-morning on Wednesday, in line with the FTSE 100.
Kleisterlee, who spent time in Asia when at Philips, will join Vodafone on April 1 as a non-executive director and take over from Bond at the firm's annual general meeting in July. He will leave Philips on March 31.
Execution's Draper said he expected Kleisterlee to bring more support for Chief Executive Vittorio Colao, as he carries out his own restructuring.
"What he might bring is stronger support from the board for what Vittorio Colao is trying to do, which is exactly that, repositioning the strategy into core geographies, repositioning the brand into mobile data and network quality and selective M&A in emerging markets."
Vodafone will report third-quarter results on Thursday and is expected to show strong growth in India, improving performances in Britain and Germany and continued weakness in Spain.
(Additional reporting by Roberta Cowan; Editing by Alexander Smith and Will Waterman)
- Tweet this
- Share this
- Digg this