Shareholders spooked as Treasury chief announces surprise departure
Shares in the nation’s biggest winemaker, Treasury Wine Estates, have been pounded after it announced the surprise departure of its chief executive, who will step down next year.
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Shares in Treasury Wine Estates have plummeted after the winemaker behind the Penfolds, Wolf Blass and Lindeman’s labels announced the surprise departure of its chief executive.
Michael Clarke, who has nursed the nation’s biggest winemaker back to health and overseen a five-fold increase in its share price, will retire next year.
The Melbourne-based company on Monday announced he would be replaced by chief operating officer Tim Ford.
Share in Treasury dropped by close to 12 per cent on Monday — their biggest one-day plunge in six years — as investors absorbed the latest shake-up of the winemaker’s executive ranks.
The company has churned through four chief financial officers in five years, while the heads of its Asian and US operations have both departed this year.
Mr Clarke, who took over the top job at Treasury in March 2014, will retire in the first quarter of the 2020-21 financial year.
The former Kraft Foods and Coca-Cola Company executive will act as an adviser to the company for a year.
Mr Clarke said he was standing down for family reasons — because he was constantly away from his wife and his UK-based parents were in poor health.
He will return to Britain when he steps down as chief.
“I can’t sustainably keep this going trying to do the right thing by the family and running the business at the same time,” he said on Monday.
“I have over the past six years … not spent a lot of time with my wife.
“That time apart is growing because of the ill health of my father and my mother.”
Mr Clarke said he would not seek another chief executive role but was open to extending his contract with Treasury to work as an adviser.
He took over Treasury after it was forced to destroy more than $30 million of spoiling wine in the US and became a takeover target for private equity.
Under his reign Treasury cut costs, restructured its distribution agreements, overhauled its marketing, focused more on higher-priced prestige lines and expanded into China.
In more recent times the company has had to defend itself against accusations from short sellers that it inflated its sales figures, while Mr Clarke has faced criticism for selling some of his shares.
Treasury chair Paul Rayner said the board would have liked Mr Clarke to stay on longer.
Mr Rayner said Treasury had undergone an “extraordinary” transformation under Mr Clarke’s leadership and was “very well placed” to continue to reward shareholders.
Mr Ford joined Treasury in 2011, managing its logistics.
He took over as chief operating officer at the start of the year, overseeing all of its global operations.
Prior to that he oversaw operations in Asia, Europe and Australian and New Zealand.
Mr Rayner said the company had not looked externally for a replacement chief.
“We are extremely confident that Tim is the right person for the job,” he said.
Shares in Treasury closed 11.8 per cent, or $2.20, lower on Monday at $16.40.
Originally published as Shareholders spooked as Treasury chief announces surprise departure