Cleanaway shares plunge after CEO's surprise exit

Shares in $4.9 billion waste management operator Cleanaway plunged close to 13 per cent on Thursday after the surprise departure of chief executive Vik Bansal.

The company's shares hit a low of $2.27, a drop of 12.7 per cent on Wednesday's closing price, after the company confirmed in a statement to the ASX that chairman Mark Chellew would step into the executive chairman role while it searched for a new chief executive.

Cleanaway Waste Management chief executive Vik Bansal is stepping down. Credit: Eamon Gallagher

The company said Mr Bansal had reflected on his future priorities over the Christmas and New Year period and decided it was the right time for the exit. "The board and Mr Bansal mutually agreed it is the right time for Cleanaway to move forward under new leadership."

In an internal memo seen by The Sydney Morning Herald and The Age, Mr Bansal told staff it would be "business as usual" despite his departure. He said the demands of his role, which included commuting from Sydney to Melbourne weekly, had been difficult.

"For the past five and a half years I have spent every Sunday flying to Melbourne and being away from my daughter for most of the week — and it has taken its toll. On honest reflection, I didn't want to keep doing it for another three to five years," he said.

Cleanaway and Mr Bansal have been under scrutiny over the past year after an investigation by The Australian Financial Review alleged Mr Bansal had bullied and harassed staff.

In September, the company told investors it "takes allegations of misconduct in the workplace very seriously" and had investigated the concerns. "Mr Bansal has acknowledged his behaviour should have been better and expressed contrition," Cleanaway said in an ASX statement at the time.

Mr Chellew said in the same statement that "Mr Bansal had some issues with overly-assertive behaviour in the workplace and has acknowledged that he needed to address them".

The company told the ASX it has been planning for Mr Bansal's succession for some time, however, and it is understood his departure is not due to the allegations of workplace culture issues.

Mr Bansal will deliver interim results for the company in February and then assist the board in the transition to a new chief executive.

Over the past five years he drove a significant turnaround of the Cleanaway business, with its market capitalisation increasing fivefold to close to $5 billion. Shares are up 246 per cent compared with five years ago, when they were hovering around 69¢.

Cleanaway shares closed down more than 8 per cent to $2.38.