Cleanaway CEO Vik Bansal to step down

Vik Bansal tipped to lead Sanjeev Gupta’s InfraBuild as, months after bullying allegations, he explains why he’s departing as CEO of Cleanaway.

Departing Cleanaway CEO Vik Bansal.

The excruciating last few months of divisive Cleanaway chief executive Vik Bansal’s tenure at the waste management company — that saw him defend charges of improper behaviour towards staff, issue a grovelling public apology and at the same time take a public reprimanded from his board — have now come to an end.

But far from a resignation due to his very public scandal around accusations of bullying, Mr Bansal conceded in an internal staff email issued on Thursday and obtained by The Australian that he “didn’t want to keep doing” the role after more than five years of relentless travel and being away from his family, including his daughter.

He is unlikely to join the ranks of Australians on JobSeeker and is now tipped to be the new boss at Sanjeev Gupta’s InfraBuild Australian steel operations, which are set to float on the sharemarket later this year.

As chief executive Mr Bansal was well liked by investors for delivering financial returns, although many fund managers and investment advisers were angered with the bullying scandal that gripped the company in September.

Shares in the company slumped more than 10 per cent as the market was informed of his planned departure, before closing down 8.5 per cent at $2.38.

Last year Cleanaway announced Mr Bansal had conceded his improper behaviour when interacting with staff but the highly successful Cleanaway boss, who had seen the share price rise 300 per cent since his arrival, escaped without any financial penalty or impact to his career. Mr Bansal’s behaviour was described by the company as “overly-assertive” and he was given what the board termed “executive leadership mentoring, enhanced reporting, and monitoring of the CEO’s conduct.”

Mr Bansal apologised to staff and managed to avoid a first strike over the issue at last year’s AGM, with 90 per cent of shareholders voting in favour of the remuneration report. However Mr Bansal voluntarily forfeited $2.3m in performance rights as an act of contrition.

On Thursday Cleanaway announced Mr Bansal will step down from his role as CEO as part of an orderly leadership transition.

In an internal staff email Mr Bansal said it was weekly commute between Sydney where he lives in the upper north shore and Melbourne where the company is based has taken its toll.

“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,” Mr Bansal said in a memo to staff obtained by The Australian.

“On honest reflection, I didn’t want to keep doing it for another three to five years.

“All jobs are hard, but to be the CEO of a company like Cleanaway is a privilege and an honour.

“One should be able to give it 200 per cent — in my view, anything less isn’t good enough as a leader you need to be realistic about what you can give and for how long”.

In a statement to the ASX earlier Thursday Cleanaway said Mr Bansal and the board had been “discussing succession planning for some time” and over the holiday period Mr Bansal decided he would leave in the first half of 2021.

The Australian understands that Mr Bansal has already accepted another corporate position, with Mr Gupta’s InfraBuild, part of the OneSteel business bought by the British businessman in 2017.

The Cleanaway move comes amid upheaval across the waste management sector, with Sydney-based rival Bingo this week revealing it was in talks with a private equity consortium led by CPE Capital about a possible $1.3bn buyout.

In morning trade Cleanaway shares were down 23c at $2.37 and later closed down 22c, or 8.46 per cent, at $2.38.

The decision to step down comes after Mr Bansal’s role was threatened by the revelation of staff complaints about his behaviour, with multiple instances of bullying alleged.

Brokerage Macquarie Equities said the timing of the exit was “surprising”.

“After overcoming a difficult period through the first half of 2021 relating to various cultural issues in the business, we would have expected Mr Bansal’s tenure to extend a little longer,” Macquarie Equities analysts said in a note to clients.

Supporters of Mr Bansal have highlighted the 300 per cent total shareholder returns achieved since he became CEO in August of 2015 and executive chairman Mark Chellew highlighted this fact.

“Vik has led Cleanaway’s transformation and growth with enormous dedication, and it shows in the company’s financial results. We thank him for his service and wish him all the very best for the future,” Mr Chellew said.

Mr Bansal said it was customary and good governance that a board and CEO are in continuous discussions around effective succession planning “and we have mutually agreed that after five-and-a-half years as CEO, this is a good time”.

He said he was proud of his time at the company but believed now was the right time to step down.

“I am extremely proud of the transformation of Cleanaway into Australia’s leading waste management business,” he said in a statement.

“It is pleasing to leave Cleanaway extremely well positioned, with a good management team for further growth and success. I do believe, considering the point in the journey and exciting strategic choices in front of us, now is the right time to hand the baton across to a new leader.”

He noted that “nobody lost their job” under the Cleanaway banner due to COVID-19 and the company delivered on all of its financial expectations over the past year.

Mr Bansal will present the company’s interim results on February 19 and will assist the board with the transition to a new CEO.

In the interim Cleanaway Mark Chellew will assume extra executive duties while chief financial officer Brendan Gill will delay his retirement to support incoming CFO Paul Binfield in the transition period.