Now here’s something we don’t get to see every day, a chief executive carrying the can for very nearly bringing a large listed company to its knees through a series of ill-judged acquisitions at the top of the market.
Tuesday’s press release from Wolseley. Emphasis ours:
Wolseley plc announces that Chip Hornsby has stepped down as Group Chief Executive with immediate effect.Commenting, John Whybrow, Wolseley plc Chairman, said:
“The Board recognises Chip’s significant contribution to the Group throughout a long and distinguished career, including nearly three years as Chief Executive, during which time Wolseley has faced some extremely difficult market conditions, and we wish him well for the future.”Of course, we shouldn’t feel too sorry for Chip. After all he’s getting a pay-off equivalent to a year’s salary, which is £750,000.As for his replacement that’s Ian Meakins, who was until recently chief executive of currency exchange co Travelex Holdings. Now we are not sure what similarities there are between the forex market and the price of lumber, but the market seems to like the news.Shares in Wolseley are up 59p to £11.85 in early trading, a rise of 5.2 per cent which has added £167m to the company’s market value. However, that probably says more about the outgoing CEO than his successor and also raises the question of whether shareholder support for Wolseley’s recent £1bn cash call was conditional on a boardroom scalp.
And finally Wolseley’s performance and Chip’s tenure:
Nice work if you can get it.
Update: 16.42 GMT
A sector analyst reckons we have been too tough on Chip. He points out that Chip inherited the over-leveraged balance sheet and the man who signed his dismissal today, chairman John Whybrow, has been at the helm during the whole saga. Perhaps it is he who should carry can. Although we note that Chip was the boss of the US division before becoming CEO.
Related links:
Dear idiot Wolseley investor – FT Alphaville