Peter Staude’s retirement as CEO of sugar producer Tongaat Hulett is presumably not a moment too soon for some analysts, including Investec’s Anthony Geard.
Geard garnered a truckload of attention when he wrote that Staude’s departure from the company was long overdue, in a June research note following the publication of Tongaat’s “appalling” full-year results.
The note then became subject of an unseemly display from both Investec and Tongaat, in which Investec apologised to Staude for any embarrassment caused, citing their “long and fruitful relationship”.
Geard argued that Staude, who has been Tongaat’s CEO since 2002, should step aside given Tongaat’s “painfully slow pace of unlocking value”, having prevailed over consistently declining returns that culminated in a 37% slide in headline earnings for the 12 months to end March.Well, that moment is now upon Tongaat – but the company’s problems may be bigger than its CEO given that the company has no successor lined up.
This is a pretty big oversight: Staude is retiring given his age (65) which the Tongaat board should surely have anticipated. The board, under chairman Bahle Sibisi, has some answering to do.
But perhaps it’s also an indication of what a hard job the CEO’s role will be: managing low international sugar prices, a fluctuating currency, a moribund domestic economy which affects land sales, and now the ANC’s intent to pursue expropriation without compensation. Not exactly a sweet deal.