Reckitt Benckiser boss Bart Becht, an executive famous for cleaning up on pay day, shocked the market yesterday with news he is to quit the consumer goods group later this year. The announcement wiped £1.5bn from the company's value.
Reckitt's announcement that its Dutch chief executive was to retire after 16 years took investors by surprise. He will be replaced by company veteran Rakesh Kapoor, who will take up the role in September.
Mr Becht hit the headlines last year when it emerged he had earned a total of £92m in 2009, making him the best-paid chief executive on record on the FTSE 100. A recent company report revealed he had subsequently earned £18.2m for last year's performance.
Mr Becht said: "I believe now is the right time to retire," adding, "16 years is a long time; I deserve a change and the company also deserves new leadership." While he has a 12-month non-compete clause, the executive said he would not join a rival anyway. "I will not be taking a full-time executive post, but will stay active in the corporate world," he said.
Reckitt chairman Adrian Bellamy said Mr Becht's contribution to the company had been "outstanding", adding: "we're truly sorry that he has taken the decision to retire". Under the chief executive's watch, the share price has soared from £6 to as high as £36 in December. But despite news that Mr Becht would stay on as an adviser until September 2012, the share price fell more than 7 per cent yesterday.
The chairman said the decision to appoint Mr Kapoor was met with unanimous support from the board "as he has the necessary drive, strategic thinking and operational experience". Mr Kapoor has worked at Reckitt since joining the Indian business in 1988 and is currently vice-president of globalcategory development as well as a member of the executive committee.
The executive, who had previously run the UK and Northern Europe business, was put in charge of strategy for the group's key products, which it describes as "Powerbrands", in 2006. Reckitt said he had an "intimate knowledge and understanding of consumers and retailers in both developing and developed countries".
He masterminded the acquisition of Boots Healthcare International in 2005, as well as the more recent acquisition of Durex's owner, SSL. Mr Kapoor said he was "looking forward to leading the business to its next stage of growth".
Reckitt & Colman bought Benckiser in 1999 with the merged group led by Mr Becht. He hit the headlines after vesting long-held options which boosted his pay packet to £92m. He thendonated £110m-worth of shares to a charitable trust.
In February, the household goods company revealed that fourth-quarter results had failed to meet analysts'expectations, sending the shares 5 per cent lower. For 2010 as a whole, pre-tax profits rose 13 per cent to £2.1bn on revenues of £8.4bn.