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BHP share price tumbles on CEO retirement news

The BHP Group Ltd (ASX: BHP) share price has tumbled lower on Thursday after announcing the retirement of its chief executive officer.

The mining giant’s shares are down 1% to $36.42 at the time of writing.

What did BHP announce?

This morning BHP announced that its chief executive officer, Andrew Mackenzie, will retire from the role on December 31.

Mr Mackenzie will also step down from being a member of the executive leadership team and an executive director on the same date. He will work through the applicable notice period.

The outgoing chief executive officer intends to hold onto his BHP shares for two years beyond retirement. Whilst this is a requirement that becomes effective next year and thus not applicable to Mr Mackenzie, he will voluntarily do it to “demonstrate his commitment to and confidence in BHP’s future success.”

New CEO announced.

BHP has acted swiftly and has already named his replacement. According to the release, Mike Henry has been appointed chief executive officer following a thorough succession process.

Mr Henry will assume the role of chief executive officer and executive director from January 1 2020.

The release explains that Mr Henry has 30 years’ experience in the global mining and petroleum industry. This includes operational, commercial, safety, technology and marketing roles.

He joined BHP in 2003, initially in business development and then in marketing and trading of a range of mineral and petroleum commodities. He then went on to hold various positions in the company. These include President Coal, President HSE, Marketing and Technology, and Chief Marketing Officer.

Chairman Ken MacKenzie said: “Mike Henry’s deep operational and commercial experience, developed in a global career spanning the Americas, Europe, Asia and Australia, is the perfect mix for our next CEO. I am confident his discipline and focus will deliver a culture of high performance and returns for BHP. Mike has been a strong advocate for the industry, driving higher standards of safety and a commitment to our local communities and global stakeholders.”

The outgoing Andrew Mackenzie also appeared pleased with the decision to appoint Mike Henry.

He said: “Fresh leadership will deliver an acceleration in the enormous potential for value and returns that will come from BHP’s next wave of transformation. Choosing the right time to retire has not been an easy decision, however the Company is in a good position. I am confident Mike and BHP will seize the many opportunities that lie ahead.”

The CEO-elect, Mike Henry, was positive on BHP’s future.

He added: “We will unlock even greater value from our ore bodies and petroleum basins by enabling our people with the capability, data and technology to innovate and improve. We must operate safely, with discipline and reduce our impact on the environment. With the right people and the right culture we will deliver value and strong returns for shareholders and for all of society.”

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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