DANNI HEWSON
AJ Bell Financial Analyst
Dark days: have companies got the right leader in place? We're seeing a lot of change at the top which might make investors nervous
T
he fact that Whitbread’s (WTB) share price fell when it said Alison Brittain would step down from her position as CEO implied that investors didn’t think now was a good time to rock the boat and bring in a new leader. Difficult economic conditions call for stability in leadership and a change at the top is a big deal, even if it’s been telegraphed, choreographed and planned down to the tiniest detail, as that change heralds a period of volatility. How long that volatility lasts often depends on the reason behind the departure and the person appointed to step into the breach. In the case of Whitbread there are questions about the timing coming so soon after shareholders kicked back at remuneration package plans. But there had been hints that retirement could be in the offing before last month’s AGM and certainly Brittain has steered the ship through some particularly trying times.
Whitbread’s volatile 10 years (p) 4,000
2,000 2014
2016
2018
2020
2022
Chart: Shares magazine • Source: Refinitiv
During her reign the business has been streamlined with Costa Coffee sold to Coca-Cola (KO:NYSE), Covid took its own toll and the share price slumped by more 30%. But the last trading update delivered plenty of green shoots with the 26
| SHARES | 07 July 2022
lucrative Premier Inn operation going from strength to strength, even if Whitbread’s pub empire is still trying to battle back to fighting weight. Brittain’s replacement seems to have been thoughtfully chosen. Dominic Paul is a former insider with a real understanding of the way Whitbread works. He’s somebody who has had the chance to spread his wings, to develop his own style and the confidence to act without looking over his shoulder. It’s notable that the share price of his current employer, Domino’s Pizza (DOM), also dropped on the news of his forthcoming departure, a nod to his capability in the top job. INFLATION CHANGING THE GAME Succession plans can soothe nerves if they’re delivered correctly but even with every duck lined up, losing a boss who has made shareholders a lot of money can be hard to get over. Peter Pritchard is such a boss and Pets at Home’s (PETS) shares jumped in value by more than 200% during his time as CEO.
