That was the value of the 8 per cent they cut from the company’s share price
on news of Mr Becht’s unexpected departure. Is he worth it? His 16-year
leadership of Benckiser has produced outstanding returns. Since he merged
the company with Reckitt in 1999, the combined group’s total return has
outperformed the FTSE 100 fivefold. That at least partly justifies Mr
Becht’s £92m pay packet in 2009 (including vested share options).
The bigger question, though, is why shareholders were not warned that Mr Becht
was on his way out. As recently as two weeks ago, as Bernstein analysts
noted, he said he was passionate about the business, a comment that implies
his continuity at least in the medium term.
Whether or not some leaders really are bigger than their company is not the
point. Many investors bought Reckitt shares to invest in Mr Becht and his
record. They could hardly be blamed for not predicting his desire to move
on; at just 54 years old, he is no Warren Buffett.
Accountable
Company boards need to be accountable for keeping investors informed about
succession planning. Mr Becht’s desire to leave has undoubtedly been
discussed internally for some time, yet investors had little idea of
succession planning at Reckitt and are unfamiliar with Rakesh Kapoor, his
successor.
Given that information about new products is readily forthcoming, it is wrong
that key personnel changes, which can move a company’s share price to a far
greater extent, are not required to be more systematically disclosed.
Page three of Reckitt’s annual report last year announces that “our employees
are our greatest competitive advantage”. Most companies say the same. If
that is the case, shareholders deserve more information about their
intentions.
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