Bart Becht has unexpectedly called time on his 16-year tenure as chief executive of household products group Reckitt Benckiser, wiping nearly £2bn from the market value of the company that makes Cillit Bang and Durex condoms.
The retirement of 54-year old Becht – best known for his record-breaking £90m pay award in 2009 – particularly unsettled investors because it came six months after the departure of Colin Day, the group's finance director and an ally of Becht for a decade. The Dutch chief executive has previously said that the group, whose brands also include Nurofen painkillers and Vanish cleaner, sells "very stupid products".
He will be replaced by Rakesh Kapoor, a Reckitt veteran of 25 years, who started working for the company in his native India and for the past five years has been in charge of managing the company's 19 so-called power brands.
Reckitt's shares fell by £2.51, or 7.5%, to close at £31.15, knocking £1.8bn off its value, amid growing fears that the best could be behind the group following the loss of its top two executives, disappointing fourth quarter results and the prospect of tough trading conditions. Charles Mills, an analyst at Credit Suisse, said: "This is a huge surprise, and is a serious loss to the business. The timing frankly couldn't be much worse."
Martin Deboo, analyst at Investec Securities, downgraded his share recommendation on the group from "hold" to "sell" on the back of Becht's departure, which is scheduled for 1 September. "We see the surprise departure as a strongly negative event … It's hard to overstate his impact and we think Reckitt now faces an uncertain future," Deboo said.
"The CEO and CFO are both new, growth in the core is decelerating [and] the company is in the midst of two integrations," he added. Reckitt acquired the Durex and Scholl footcare brands when it took over SSL last year.
Deboo also raised concerns about Kapoor's ability to succeed Becht, saying: "We find ourselves in the uncomfortable position of having to make an initial judgment on very limited acquaintance."
Becht's surprise resignation comes shortly after Reckitt hit a rough patch following a decade of strong, expectation-exceeding growth that led to an almost sixfold rise in the company's share price. However, in February the group's figures failed to meet shareholder expectations. Commenting on the results at the time, Becht said: "Some people believe we can walk on water; well, we cannot walk on water."
Reckitt's shares are down about 14% this year, with a number of analysts claiming the group has gone "ex growth" amid growing competition in its main household products business from companies such as Unilever.
Furthermore, its Suboxone heroin substitute – a key product in its healthcare division – faces the prospect of generic competition.
Becht said: "After 16 years in the role, I believe now is the right time to retire. We have the strongest senior management cadre we have ever had, our new CFO is bedded-in excellently and our SSL integration is on track."
Becht has led Reckitt Benckiser since the company was formed in 1999 through the merger of Britain's Reckitt & Colman and Holland's Benckiser. He led Benckiser for four years before that deal.
He has become famous for collecting huge payouts in his role as chief executive, but also for giving much of his wealth away. In 2009 he transferred nearly all his stock options, worth about £110m, to charity. Since 2005 he has collected more than £220m from Reckitt.
