The people in the driver's seat of a company can make or break it. Therefore, it's worth paying attention when an ASX 200 company — or any listed company for that matter — sees a change in its management.
It can be especially crucial after an extended run of poor performance. Like a plant, companies sometimes need to prune old branches to create healthy new shoots. The process can breathe new life into a withering business if done right.
Today, two multi-billion-dollar companies have announced new blood in their highest ranks. The ASX 200 members flexing fresh CEOs are Perpetual Ltd (ASX: PPT) and Atlas Arteria Group (ASX: ALX).
Both companies have dramatically failed to outperform the S&P/ASX 200 Index (ASX: XJO) over the past five years. The chart above graphically shows this by comparing the companies' share prices against the benchmark.
Who's taking the reins of these ASX 200 companies?
After struggling with dwindling profits for several years, Perpetual is instating a new leader. The Australian wealth manager has appointed Bernard Reilly as chief executive officer and managing director, effective 2 September.
Perpetual's move to appoint Reilly arrives as the company undergoes a transformation. As covered earlier this year, the 138-year-old financials business is offloading its wealth management and corporate trust business to zero in on operating a global multi-boutique asset management business.
The newly appointed CEO of Perpetual previously led the Australian Retirement Trust — one of the largest super funds, managing the superannuation of more than 2.3 million Australians. Perpetual chair Tony D'Aloisio said, "[…] Bernard has extensive first-hand experience in managing client monies and a strong understanding of the challenges facing the asset management sector."
Reilly's fixed remuneration under the appointment is $1,000,000 (including superannuation), in addition to various short-term and long-term incentives.
What about the other ASX 200 company, Atlas Arteria?
The private toll road operator has poached its competitor's chief commercial officer for the top job. That's right, Hugh Wehby of Transurban Group (ASX: TCL) will be packing up and moving across to the rival within the next 27 weeks.
According to Atlas Arteria's chair, Debbie Goodin:
Hugh is coming in with a clear mandate to drive forward our strategy: to pursue operational excellence to drive value; to pursue growth opportunities related or adjacent to our current businesses; and to manage our balance sheet and capital so that we can unlock additional value for securityholders.
Wehby will receive a fixed remuneration of $1,450,000 (super inclusive). Additional cash payments and equity awards will also be provided to the incoming executive to compensate him for forfeited Transurban incentives.
Both ASX 200 companies' shares are mostly flat today despite the news.
