Mobile phone giant Vodafone has revealed its boss Nick Read will step down at the end of the year just weeks after unveiling an £880 million plan to slash costs and warning over job cuts and price hikes (PA)
(Picture: PA Archive)VODAFONE today dramatically ousted long-serving company man Nick Read as CEO after becoming frustrated at the pace of change and lacklustre share price under his leadership.
While the statement said Read, 58, “has agreed with the board” to step down, the immediate appointment of CFO Margherita Della Valle as interim CEO hints at the discontent.
Pointedly, the release to the stock market said Della Valle “will accelerate the execution of the company’s strategy to improve operational performance and deliver shareholder value”.
Read will stay as an adviser until next March and will be eligible for a bonus.
Last year he was paid £4.1 million and a deal of that order seems likely. He also holds 17.2 million Vodafone shares worth £15.6 million at today’s price of 92p.
Voda shares have underperformed the wider stock market by some way during Read’s tenure, a frustration for investors in one of the most widely held shares in Britain.
Read said: “I agreed with the Board that now is the right moment to hand over to a new leader who can build on Vodafone’s strengths and capture the significant opportunities ahead".
He joined Vodafone as the UK finance director in 2001, becoming UK CEO under Arun Sarin. He replaced Vittorio Colao as group CEO in May 2018.
Read earnt credit for shaking-up a sprawling business to make it solely Europe and Asia focussed. He exited countries and regions where he decided Vodafone didn’t have scale to compete.
Vodafone sold a $16 billion stake in its telecom towers arm to KKR in November.
It floated its Vantage Towers are in Frankfurt last March, allowing dividends to shareholders but not boosting the actual share price.
Analysts think the present dividend is now under threat -- further downward pressure on the shares.
Jefferies said in a note to clients: “Nick Read’s decision to step down as CEO suggests that the board appreciates the scale of the challenges it faces, and is now intent on injecting some urgency into the recovery of shareholder value. However, the next question is what solutions are really available to the next CEO? Vodafone faces intractable headwinds. We think dividend policy should be treated as under review.”
Vodafone had been under attack from activist investor Cevian Capital.
Russ Mould at AJ Bell said: “With the shares languishing at their lowest levels in more than 20 years it is hard to describe departing Vodafone CEO Nick Read’s tenure as anything other than a disappointment.
“It was a damning indictment back in October that activist investor Cevian Capital had apparently begun to give up on hopes of Vodafone ever turning it around as it slashed its stake in the company.
“Read’s final set of results last month did him absolutely no favours, as Vodafone downgraded full-year guidance. Perhaps more worrying was that the response to the pressures the company was facing was simply to cut more costs.”
