Sigma CEO Mark Hooper resigns after 11-year tenure

Sigma Healthcare’s CEO is quitting the pharmaceutical wholesaler and chemist brand owner to ‘pursue other opportunities’.

Mark Hooper is quitting Sigma to “pursue other opportunities”. Picture: David Geraghty

Outgoing Sigma Healthcare chief executive Mark Hooper says his resignation has nothing to do with shareholders hitting the company with a first strike over its executive remuneration at last year’s annual meeting.

Mr Hooper announced on Monday he would leave Sigma in October after 11 years helming Australia’s biggest pharmaceutical distributor and chemist brand owner.

His departure comes amid a growing list of chief executives - including AGL’s Brett Redman, Premier Investment’s Mark McInnes, Lendlease’s Steve McCann, and Martin Ward from AP Eagers - who have resigned after copping pay strikes.

The timing of his resignation is unusual, given the company announced its half-year financial results four weeks ago and now is the time chief executives normally spend talking up the company’s strategy to investors and fund managers.

It also comes a month before Sigma’s AGM where a second strike on executive pay could spark a board spill motion.

At last year’s meeting 29.2 per cent of shareholders voted against Sigma’s remuneration report - passing the 25 per cent no-vote threshold to record a first strike - after it paid bonuses to retain key personnel during a failed takeover bid from rival Australian Pharmaceutical Industries.

But Mr Hooper said his departure had nothing to do with the pay strike and it had been something he had been mulling for the past three years.

“It is purely related to me making an assessment about what I want to do longer term now that the company is back in great shape,” Mr Hooper told The Australian.

“You don’t always control the timing over these things.”

Sigma shares fell 1.45 per cent to 68c on Monday compared with a 0.2 per cent fall across the broader share market.

Mr Hooper said he was considering stepping down in 2018 - in what would have been eight years in the top job. But Sigma walked away from its exclusive pharmaceutical distribution contract with Chemist Warehouse, losing a third of its revenue and scuttling his plans.

“When we made that decision not to renew the Chemist Warehouse contract, I had this real sense of obligation to the business, and particularly our customers and our people, to be here to get the business back into good shape. That’s more of the catalyst here.

“The business is now in good shape. We’ve made that recovery after making a decision around Chem Warehouse. It was more about me sitting here thinking well, ‘am I committed to doing this for another four, five or six years?’

“This should be a really great opportunity for Sigma to accelerate. After 11 years I think a fresh set of eyes would be a good thing.”

Following Sigma’s decision to withdraw from its exclusive contract with Chemist Warehouse in 2018, the company’s profit dived 80 per cent to $2.52m in the following half-year, and its share price went into a tailspin.

But the company maintained its course, with former chair Brian Jamieson and the board backing management led by chief executive Mark Hooper and invested $300m in upgrading its distribution centres.

Chemist Warehouse later returned half of its previous contract with Sigma, leading to its sales increasing about 7 per cent, double the industry average, last year.

The icing on the cake came last month when Sigma resumed paying dividends after swinging back into the black, with a net profit of $59.76m in the 12 months to January 31, versus a $12.33m loss the previous year.

“The fact that we delivered a strong set of financial results gave me the confidence to say to the board ‘I think it’s time to give this to someone else’,” Mr Hooper said.

But he isn’t planning on retiring, believing he has at least one more CEO gig in him - and he is not fussy about the sector or ownership structure. But he did say his skills lean more towards private equity.

“I’m still very keen to stay in an executive role. I would like to take on another CEO opportunity somewhere. I think my skill set probably suits private equity a little better because obviously I’ve done quite a bit of restructuring work at Sigma.

“One of the elements of making the announcement today was it gives me the opportunity to engage more freely with people who might be willing to take me on somewhere.

“I can have those discussions in a much more open fashion, which fairer to the Sigma business and it also means I’ve got more scope to do that over the next three to six months.”

Sigma chairman Ray Gunston, who was appointed last April, said he had “regrettably accepted” Mr Hooper’s resignation.

“However we understand his desire to pursue other opportunities after more than ten years in the role. He has demonstrated strong leadership and personal dedication for the benefit of shareholders, customers and Sigma team members,” Mr Gunston said.

“I sincerely thank Mark for his tremendous contribution throughout his tenure.

“Mark became CEO at a tough time for Sigma and put it on a pathway for a stronger future. He then undertook the biggest transformation in the company’s history and has set Sigma up for strong earnings growth. I personally, and all of us at Sigma, are very grateful for Mark’s hard work, vision and support over more than 10 years.”