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Nestlé loses chief for Asia as Unilever CEO job looms large

Oct 18 2018 23:00
Corinne Gretler and Thomas Buckley, Bloomberg

Nestlé SA’s highest-ranking executive in Asia is leaving the Swiss food giant just as the top job at rival Unilever is set to open up.

Wan Ling Martello, 60, is leaving at the end of this year to explore new opportunities and will be replaced by Chris Johnson, the Vevey, Switzerland-based company said on Thursday.

The shift comes as Unilever, the Anglo-Dutch maker of Dove soap and Ben & Jerry’s ice cream, comes up on a year looking for a replacement for chief executive officer Paul Polman, sparking speculation Martello may be trying to line up that job.

It’s the highest-profile departure at Nestlé since Mark Schneider became CEO last year, the first time in about a century that the world’s biggest food company has given the top job to an outsider. Schneider’s reign has been notable for an absence of management upheaval, as the CEO said last year he thought the company had the right people in the right places.

"The departure of Wan Ling Martello is a big disappointment," wrote Andrew Wood, an analyst at Sanford C. Bernstein. It "leaves a hole that will be tough for Nestlé to fill."

Sales updates

Unilever, which began a search last year for a successor to the 62-year-old Polman, said nothing about the process on Thursday as both companies reported sales that were roughly in line with estimates. Analysts have said the failure of a plan to consolidate Unilever’s headquarters in the Netherlands, following dissent from some UK shareholders, could accelerate his departure.

Nestlé rose as 0.4% as of 10:33 in Zurich, while Unilever dropped 1.6% in Amsterdam.

The latest numbers showed that consumer-goods companies are still struggling to raise prices amid pressure from discount retailers. But Martello is leaving her business zone in good condition. Her region is Nestlé’s most profitable and fastest-growing, though the US-China trade war has cast a cloud over future prospects.

She was hired by then- Nestlé CEO Paul Bulcke seven years ago, having formerly worked for Walmart.

Martello is planning to take on a new job rather than retiring, according to a person familiar with the matter, who asked not to be identified. Her age could be a hurdle to the Unilever post if the Anglo-Dutch company wants a successor to have the same longevity in the post as Polman, who has served as CEO for nearly a decade.

Martello may have other prospects besides the consumer-goods industry. Ride-sharing upstart Uber added her to its board last year amid the fallout about its management culture under former CEO Travis Kalanick.

She also has served on the board of Alibaba since 2015. Both companies recently named new chairpersons.  

"From day one at Nestlé, I have always thought I belonged here," Martello said in a statement.

With Johnson, Nestlé is promoting one of its longstanding executives as activist investor Dan Loeb says the company needs more outsiders. Third Point, Loeb’s firm, has invested about $3.5bn in the Nescafé maker.

"We regret the departure of Wan Ling Martello, and are surprised by the choice of Chris Johnson," wrote Jean-Philippe Bertschy, an analyst at Bank Vontobel. "We believe that this represents a temporary solution to guarantee a smooth transition."

Martello is a US citizen but speaks Mandarin and Tagalog, having both Chinese and Filipino heritage.

‘Change agent’

"We have viewed her as a change agent internally and something of a figurehead for a newer, more emerging-market and digital-savvy Nestlé," wrote Martin Deboo, an analyst at Jefferies.

While Nestlé’s revenue from China is now growing at a mid-single-digit percentage pace, the escalating trade war threatens to damp consumption. Danone said on Wednesday Chinese customs officials are becoming stricter on imports of foreign baby food, a business that both the French company and Nestlé have expanded into.

Johnson is a 35-year veteran at Nestlé and helped implement Globe, a program to monitor costs and boost efficiency. The 57-year-old Los Angeles native was regarded as a candidate when the Nestlé CEO job came up.

In August he added human resources to his responsibilities. In Thursday’s statement, Nestlé, devoted five sentences to praise Martello’s "intellectual rigor," "passion for digital transformation" and ability to inspire people. That contrasts with its farewell to Polman a decade ago when the former Nestlé CFO quit the Swiss company after having been passed over for the CEO job.

In that release, Nestlé had a one-sentence summary of Polman’s achievements, saying he "played an important role" in Nestlé’s shift to focusing more on nutrition and health.

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nestle  |  unilever  |  companies  |  ceo
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