Domain in the market for new chief as Pellegrino heads for exit

The former Google Australia boss Jason Pellegrino will leave Domain after six years running the company, and investors want a new chief to spark growth.

Domain CEO Jason Pellegrino. Picture: Domain Holdings Australia Limited

The head of Nine-controlled property listing company Domain Holdings, Jason Pellegrino, will stand down with the company, kicking off a search for a new chief executive.

Domain has been in the cross hairs of private equity firms, with US group KKR rumoured to have run the ruler over the company, as Nine tries to turnaround the real estate unit’s performance after years as a share market laggard.

The Domain chief’s departure comes as the media company deals with an investigation that found extensive misconduct including sexual harassment and bullying in the television business and former Nine chief Mike Sneesby departed last month.

Mr Pellegrino, who had six years at the helm, will continue as chief executive for three to six months to support the succession process before departing the business. Domain said the “staged and orderly exit” would allow the board to “assess its requirements and evaluate candidates to lead the company going forward”.

The company has been left behind by its main rival, the much larger REA Group, which is controlled by News Corporation, publisher of The Australian. Domain traded around $3.20 in the month that Mr Pellegrino started but on Tuesday morning had slipped back by 6c to $3.04. But REA shares have jumped from around the $85 to $227 in that period.

Domain was unable to capitalise on the nation’s residential property boom and to expand into adjacent areas in the same way that REA did, while it also struggled to grow its geographic footprint and it also made a failed play for PEXA in 2021.

Domain chair, Nick Falloon, said Mr Pellegrino had shifted Domain from a media-led classifieds business to a technology-led property marketplace.

“He leaves Domain in a strong financial, operational and cultural position, underpinned by robust digital infrastructure that enables us to be highly competitive across the entire property ecosystem,“ Mr Falloon said.

The company faced disruptive periods, including the Covid-19 crisis that slashed property listing and then the bounce back in the market driven by low interest rates.

The acting chief executive of Domain’s major shareholder, Nine, Matt Stanton, said Domain has grown steadily and has a highly promising pipeline of innovation.

“Jason has also been instrumental in cultural transformation, overcoming historical challenges to create an environment that is positive and rewarding for staff. I look forward to working with Jason’s successor to deliver on the significant opportunities that lie ahead for Domain,” he said.

Mr Pellegrino said that the company was in a strong financial position and the property market was in a robust state, making it an “appropriate time to initiate this change”. “In the meantime, I remain committed to the Company and supporting my successor with a smooth transition,” he said.

Citi analyst Siraj Ahmed said the market would not be surprised by the change at the top of the company.

“We do not think investors will be surprised with Domain announcing a CEO transition process given the 6-year tenure of the current CEO and Domain’s market share loss to REA over the last two year,” he said.

Mr Ahmed said that from a timing perspective, not read too much into potential for near-term earnings weakness and expects Domain to report a strong first quarter given the strength in listings growth in Sydney and Melbourne.

Citi is hoping a candidate can emerge to boost Domain’s consumer profile, potentially using its media assets.

“While the current CEO has transformed Domain from being a classified business to more of a marketplace, we believe a change in focus more on the consumer and increasing consumer engagement as key to driving market share and yield growth,” he said.

“We do note that the current leadership has been focusing on ‘Only on Domain’ experiences recently and we see an opportunity to leverage Nine’s audience to drive further audience growth for Domain,” he said.

Originally published as Domain in the market for new chief as Pellegrino heads for exit