Reckitt Benckiser CEO Laxman Narasimhan became the latest CEO to join the mass leadership exodus from the FTSE 100 on Thursday.
Narasimhan’s surprising announcement came as an unwelcome shock to shareholders, with the company’s stock price falling 4.2% to 6,366p in early afternoon trading.
His departure marks the 17th CEO to leave a FTSE 100 company in 2022, with analysts citing the difficult macro-economic environment as the driving factor behind the slew of resignations.
“Investors in Reckitt Benckiser are clearly disappointed by the unexpected – and very rapid – departure of chief executive officer Laxman Narasimhan, judging by the share price slide in early trading,” said AJ Bell investment director Russ Mould.
“Mr Narasimhan cites the opportunity to take up a post in the USA after just three years in the role and the news means that FTSE 100 firms have announced 17 changes at the very top so far in 2022.”
“Spikes in the number of CEO changes can come when times are getting tougher, either economically or at least in terms of share price, at least if the jump in departures in 2000, 2007 and 2020 are any guide.”
Investors had welcomed Narasimhan’s time of service at the group, during which the departing CEO worked to kickstart advances in the company following a slate of poor business performances, including the failed $18 billion acquisition of Mead Johnson, the South Korea humidifier disinfectant debacle and a cyber attack which took place during prior CEO Rakesh Kapoor’s tenure.
“[Investors] had warmed to his efforts to re-establish positive momentum at the company after the ultimately failed $18 billion acquisition of Mead Johnson, legal and reputational fall-out over a humidifier disinfectant sold in South Korea and a high-profile cyber-attack, all of which bedevilled the firm during the latter stages of Rakesh Kapoor’s eight-year stint as CEO,” said Mould.