Chief executive stepping down after 13 years, making way for Ivan Menezes
The boss of Diageo, Paul Walsh, is stepping down after 13 years at the helm of the company behind Smirnoff and Guinness. He will make way for company-veteran Ivan Menezes, who has been chief operating officer of the drinks group since March last year.
Walsh, 57, will step down from the board at the annual meeting in September and will stay on until June next year to help ease the transition, drawing a full executive salary.
Last year, Walsh received a £1.2m salary, as part of a total pay package worth £11.2m. Diageo chairman Lord Davies said that his remuneration was “appropriate” given the strong performance of the business. Walsh has complained about anti-business sentiment in the UK, claiming that top executives are “constantly bludgeoned” for their high pay.
He has also cashed in shares worth £12.7m since last September, though he retains a substantial personal holding in the drinks group of 770,000 shares worth £15.4m.
Walsh has been chief executive of Diageo, which also owns Baileys and Johnnie Walker, since September 2000. The company’s share price has more than tripled in that time, aided by acquisitions including Turkey’s Mey Içki and the recent agreement to buy a stake in India’s biggest liquor maker, United Spirits.
Faced with sluggish demand in recession-hit European economies, Diageo has been buying up brands in emerging markets, where it aims to make around half of its turnover by 2015.
Walsh said on Tuesday: “Diageo is one of the world’s leading businesses, a position it has earned through the efforts of every one of its talented people, who are passionate about our brands, our contribution to society and our performance. The pivotal role which Ivan has played in building this position for the business demonstrates that he is the right person to lead Diageo on the next stage of its journey.”
Menezes originally hails from India, and headed up Diageo’s key North America division for eight years before his appointment as chief operating officer last year.
Martin Deboo of Investec said: “It’s not a total surprise, that’s the first thing to say. This has been a well-flagged transition.” He added that Menezes had been the lead candidate to take over. “It was very much his to lose,” he said. The City was unmoved by the news and the shares inched up 0.25% in early trade.
A Diageo spokeswoman said Walsh had not yet decided what his next move would be. He holds a number of corporate non-executive roles, as well as working as a business ambassador for the government’s business department.
His is the second high-profile departure from the FTSE 100 in a week, after Peter Voser stepped down as chief executive of oil group Shell.