Industrial explosives company Orica Ltd (ASX: ORI) has officially appointed Alberto Calderon as its new Managing Director and Chief Executive Officer, almost two months after he took on the role on a temporary basis.
After having undertaken an "extensive and rigorous global search" for a replacement for Ian Smith following his sudden departure in March, the board established that Calderon was the appropriate replacement moving forward.
Calderon has experience in leadership across various large organisations in the resources sector, including his senior executive role at BHP Billiton Limited (ASX: BHP). Orica's chairman Russell Caplan said: "He has a deep understanding of our business and customers that ensures he is the natural fit to lead the continued implementation of Orica's strategy."
Calderon has been appointed on a rolling contract with no fixed term, on a remuneration package that is benchmarked to the market. Pleasingly, his remuneration has a higher proportion at risk, meaning that it is largely subject to him meeting both short and long-term performance criteria, thus aligning his interests with those of Orica's shareholders.
As it stands, Orica's shares are trading at $21.12. Although the stock might look cheap at that price, with a price/earnings ratio of just 12.9x last year's earnings, it is by no means a risk-free investment given the high level of uncertainty in global resources markets, which makes it difficult to predict future earnings potential.
