The world of business is never short on surprises, and recent developments at Rolls-Royce and Unilever offer compelling examples of dramatic shifts and strategic decisions. From soaring share prices to unexpected executive departures, here's a look at what's been happening.
Rolls-Royce's Remarkable Turnaround
Rolls-Royce has seen an incredible resurgence under the leadership of Tufan Erginbilgiç. Joining as CEO at the start of 2023, Erginbilgiç has overseen a period of dramatic growth. "He didn’t quite catch the bottom for Rolls-Royce’s share price when he joined," notes Nils Pratley, "but he came close." The initial reference price for his £7.5m "golden hello" shares was 91p. Now? The engine-maker's share price has skyrocketed to 732p, a 16% increase following a remarkably positive full-year report.
This surge means Erginbilgiç’s signing-on package has ballooned to an impressive £60m. While he must wait until 2027 and 2028 to fully collect the shares, the risk of these gains disappearing seems minimal. The full-year results have exceeded even the most optimistic expectations from City analysts, solidifying the company's recovery.
Unilever's Unexpected CEO Change
In contrast to the prolonged and often predictable ousting of CEOs in FTSE 100 companies, Hein Schumacher's departure from Unilever is something of an anomaly. Usually, these exits are preceded by disappointing financial results, falling share prices, and shareholder pressure. However, Schumacher's situation is different.
He had only been in the job for a little over 18 months. While the fourth-quarter revenue figures for 2024 were somewhat weak, the overall numbers were acceptable. Furthermore, the share price has actually increased by 10% since Schumacher's appointment. As Nils Pratley observes, "Getting rid of Hein Schumacher may not follow the usual FTSE 100 script, but boards should be free to make clinical judgments if there’s a better option."
There appears to be no major disagreement over strategy, although the decision to list the soon-to-be-demerged Magnum and Ben & Jerry's ice-cream division in Amsterdam may not have been universally favored. This move highlights the complex decisions that boards face and their prerogative to act decisively, even without the typical warning signs of a failing leadership.
What Does it All Mean?
These two stories, while different, illustrate the dynamic nature of the business world. Rolls-Royce's resurgence shows the potential for dramatic turnarounds under effective leadership, while Unilever's CEO change highlights the increasing willingness of boards to make swift, strategic decisions, even when conventional wisdom might suggest otherwise. Only time will tell what the long-term impacts of these changes will be.