Unilever chief Alan Jope to retire next year

Alan Jope is to retire as chief executive of Unilever at the end of 2023 following investor discontent over lacklustre performance during his time leading one of the world’s largest consumer goods groups.

The maker of Hellmann’s mayonnaise, Magnum ice cream and Cif cleaning products said on Monday it would begin its search to replace Jope, 59, who took charge in January 2019.

Unilever has faced a period of upheaval after shareholder discontent over a languishing share price was heightened by an unpopular and unsuccessful attempt to buy the consumer health arm of GSK for £50bn in late 2021.

Shares in the FTSE 100 group rose 3.5 per cent on Monday morning before falling back to £41.22, or 2.8 per cent above their opening price — still below their level at the start of Jope’s tenure.

One company insider said Jope had long planned to do the job for five years but would have stayed on if the GSK bid had been successful. Chair Nils Andersen is expected to step down by the end of 2024, the person said.

Jope’s planned departure follows the arrival of activist investor Nelson Peltz, whose Trian Fund Management has a history of shaking up consumer goods makers. Peltz joined Unilever’s board in May after Trian built up a stake in Unilever.

“Investors may [see] the hand of Trian here, usually focused on accountability,” said Bruno Monteyne, an analyst at Bernstein. “More management change may be coming.”

Trian said it was “sorry to learn of Alan Jope’s decision to retire as CEO of Unilever . . . As a board member, Trian’s CEO Nelson Peltz looks forward to continuing to work closely with Alan until his departure and to being part of the process of choosing a new leader for the company.” 

Unilever, which is wrestling with the record fall in the pound and steep rises in commodity costs, opted to announce Jope’s departure more than a year in advance so it could carry out the recruitment process without worrying about leaks, said one person briefed on the situation.

Observers said Unilever could look to its own senior ranks for candidates to replace Jope, such as food division chief Hanneke Faber, or externally to figures such as Shailesh Jejurikar, chief operating officer at Procter & Gamble.

“There remains some nostalgia for Dave Lewis,” said Samuel Johar, chair of headhunters Buchanan Harvey, referring to the former Tesco chief executive, who was previously at Unilever.

One top 20 investor said they favoured “someone from outside with a fresh pair of eyes”. 

“Everyone has Unilever on their CV,” the investor added. “It could be good to see someone coming from a slightly different industry.”

Jope joined Unilever in 1985 as a trainee and worked in various sales and marketing roles. He headed several of the group’s divisions, including beauty and personal care, and Unilever’s China operations, before taking over as chief from Paul Polman.

He scrapped Unilever’s dual headquarters structure in London and Rotterdam, establishing a single base in London in a step seen as paving the way to faster mergers and acquisitions activity.

However, the failed GSK bid was followed by criticism from major shareholders, including Terry Smith of Fundsmith, who said Unilever had “lost the plot” with an excessive focus on sustainability over profits. Nick Train, of Lindsell Train, in June attacked its “pedestrian” performance.

Jope announced a restructuring of Unilever into five divisions in January, together with about 1,500 management job cuts.

Jope said: “As I approach my fifth year as chief executive, and after more than 35 years in Unilever, I believe now is the right time for the board to begin the formal search for my successor.

“Growth remains our top priority, and in the quarters ahead I will remain fully focused on disciplined execution of our strategy.”

However, James Edwardes Jones, an analyst at RBC Capital Markets, said: “Our immediate concern is that this leaves 15 months until his retirement with a CEO who might be seen to have lost credibility with employees and other stakeholders — this at a time when Unilever will be implementing and bedding down a fundamental reorganisation.”

Andersen said: “Alan’s retirement next year will mark the end of a remarkable career with Unilever. Under his leadership, Unilever has made critical changes to its strategy, structure and organisation that position it strongly for success.”

Additional reporting by Mark Wembridge