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Unilever has removed Chief Executive Hein Schumacher less than two years into his tenure, appointing Chief Financial Officer Fernando Fernandez as his successor to help rejuvenate the company’s performance. Schumacher, who has led the company since July 2023, will step down by mutual agreement on March 1, the company announced on Tuesday.
This sudden leadership change coincides with escalating pressure from investors, including U.S. activist Nelson Peltz, to enhance the company’s underwhelming performance. The shift follows a significant restructuring initiated by Schumacher, involving plans to divest the ice-cream segment and cut costs at the Magnum and Ben & Jerry’s manufacturer.
The decision to remove Schumacher was reportedly made at a board meeting on Monday, as directors concluded Fernandez was better suited to implement the turnaround strategy. Schumacher had been appointed in 2023 by the former chair Nils Andersen and was thought to be Peltz’s choice for the role. Andersen was succeeded by Ian Meakins, a British businessman recognized for his forthright approach.
Fernando Fernandez, an Argentine who has been with Unilever for nearly four decades, previously headed the company’s beauty division and became CFO in early 2024. Known for his decisive, results-focused management style, Fernandez is favored by investors according to both analysts and industry insiders.
The announcement elicited surprise from analysts. Unilever’s stock had been performing strongly since Schumacher assumed the CEO role, with an 11% rise, surpassing many competitors. Schumacher introduced an extensive restructuring plan, involving the elimination of 7,500 jobs and the spin-off of the ice-cream division, leading to substantial internal changes and the exit of several senior executives.
During Unilever’s recent full-year results, the company projected sluggish growth and poorer than expected earnings at the start of the year, sparking concerns about the progress of Schumacher’s turnaround endeavors. James Edwardes Jones, an RBC Capital Markets analyst, expressed surprise at Schumacher’s release, stating he was “highly regarded” and that the decision was unexpected. Jefferies analyst David Hayes acknowledged the move as surprising but speculated that investors would see Fernandez’s appointment positively, noting his direct, albeit maverick, approach.
Callum Elliott from Bernstein remarked that while Fernando’s promotion was not a surprise, the timing and manner of the transition were unexpected. Unilever confirmed that Schumacher would receive a compensation package for his remaining contract term and be considered a “good leaver.”
Unilever’s chair Ian Meakins commended Fernando Fernandez’s decisive, results-oriented approach and impact on change. He expressed gratitude to Schumacher for his strategic reset, bringing focus and discipline, and for achieving solid financial progress in 2024. Previously, Schumacher announced plans to sell smaller, underperforming food brands accounting for approximately £1 billion in revenue, possibly including brands like Vegetarian Butcher, Pot Noodle, Marmite, and Colman’s.
Following the news, Unilever shares fell by 2% in early trading. Schumacher is set to depart the company on May 31.
