Unilever’s Socially-Minded CEO Paul Polman Is Retiring. Meet His Replacement
Unilever named personal-care head Alan Jope to succeed Paul Polman as chief executive officer, choosing a safe pair of hands to lead the consumer-goods giant after a turbulent period.
Jope, 54, represents continuity at the maker of Dove soap and Ben & Jerry’s ice cream. He takes over after Polman, who is 62, fended off an unwanted takeover bid from Kraft Heinz Co. and backed down on a plan to consolidate the Anglo-Dutch company’s headquarters in Rotterdam.
The shares rose as much as 0.6% early Thursday in Amsterdam and are up about 5% for the year.
The appointment of Jope, who’s sought to increase Unilever’s profitability by assembling a division called Prestige with high-end skin-care brands such as Ren and Dermalogica, comes at a time when activist investors and companies like Kraft Heinz are pushing the industry to widen profit margins. Polman, who has run the company for nearly a decade, has been one of the industry’s foremost champions of sustainability initiatives.
Jope brings a digital sensibility to the CEO suite, having pushed the use of new marketing tools to connect with millennial consumers. Last year, he founded a tech hub in New York’s Tribeca neighborhood to focus on online communications for brands such as Dove and Axe shower gel. Insights gleaned from that team were also used to support new labels such as Love Beauty and Planet, an environmentally friendly personal-care line.
Jope used to run Unilever’s China operations, whose performance under the CEO-in-waiting has received praise from Polman. The executive also has experience in the company’s food arm, giving him knowledge of both of its key business areas. Market speculation had also focused on other internal candidates such as Chief Financial Officer Graeme Pitkethly and food and refreshments chief Nitin Paranjpe, as well as external choices who might have led the company in a new direction.
Naming Jope isn’t “an external ‘rock star’ appointment, which might come as a disappointment to some,” RBC analyst James Edwardes Jones said in a note.
The personal-care division was the company’s largest last year, with sales of 20.7 billion euros ($23.6 billion), almost double the food business and just under half the company’s total revenue. The unit has become a breeding ground for British CEOs, with previous leader Dave Lewis being named head of Tesco Plc in 2014.
Under Polman, Unilever has revamped its portfolio with the acquisition of niche brands such as organic tea maker Pukka Herbs and Sir Kensington’s condiments, racing rival Nestle SA to capitalize on consumer demand for healthier, higher-value products as mainstream brands stagnate.
The decision on the new CEO, which followed a yearlong search, was finalized Wednesday at a board meeting at Unilever’s North America headquarters in New Jersey. The appointment is effective Jan 1. Polman will support the transition in the first half of 2019, the company said.
Polman has been one of the business world’s most vocal proponents of aligning profits with social purpose. He has sometimes come under fire for not focusing enough on shareholder returns, but countered last year by saying the share-price gains under his watch were higher than those of Warren Buffett, one of Kraft Heinz’s largest investors.
Unilever’s share gains in London over his tenure to that date had been 159%, compared with 154% for Buffett’s Berkshire Hathaway Inc. over the same period. Today, Polman’s returns stand at 170%, compared with Buffett’s 236%.
“Just like one of Unilever’s highest-profile products, Marmite, Polman engenders strongly differing opinions from investors,” Bernstein analyst Andrew Wood said in a note. “We consider that Polman has been an exceptionally good CEO of Unilever.”