Last Friday it was all love and kisses at Treasury Wine Estates (TWE), with the company releasing its notice of meeting for the AGM to be held on October 23 in Adelaide, which included a recommendation for the then CEO David Dearie to be issued performance rights as part of an incentive plan.
Yesterday the CEO was shown the door – with immediate effect , which means right away, and the company has started a search for a new CEO, and now wants to rescind the proposal for the AGM to approve those performance rights.
If the cliche says that a week is a long time in politics, then three days or a weekend is equally a long time for a CEO at Treasury Estates.
Investors took note of the latest bout of instability at the company and sold down the shares by more than 6% or 29c to $4.46.
At one stage the shares were down around 9%, despite the company holding a conference call to try and explain the departure.
TWE YTD – On Friday Treasury Wine’s CEO was worth an incentive, yesterday he was out the door
Mr Dearie’s departure is another shock from the company which earlier in the year surprised by revealing it had tens of millions of dollars of unsold wine in the US that would have to be destroyed because it couldn’t be sold.
Mr Dearie had been at Treasury for two years and from what the company has said, many of the problems in the US pre-dated his appointment.
But it seems he’s the chief victim of demands from some big shareholders for a corporate head to blame for the debacle.
Those US problems came at a cost of $160 million, including some $35 million worth of wine that will have to be destroyed.
Treasury chairman Paul Rayner said yesterday in a statement to the ASX that the board had decided to search for a new chief executive in the wake of a major write-down of aged and excess stock in the US.
‘‘Following the write-down of excess US inventory announced on July 15, the board has undertaken a review and concluded that now is the right time to look for a new CEO,’’ he said in a statement yesterday.
‘‘In particular, having established a solid platform since demerger, the board believes Treasury needs a leader with a stronger operational focus to deliver the company’s growth ambitions.’’
Mr Rayner did not explain why Mr Dearie had been shown the door yesterday.
The company said board member Warwick Every-Burns will be appointed interim CEO while the company searches for a new chief executive.
Mr Rayner thanked Mr Dearie for his contribution to Treasury since being appointed CEO in May 2011, immediately prior to its demerger from Fosters Group.
‘‘Over the last two years, David has played a critical role in guiding Dearie through its demerger and establishing the company as a standalone business,’’ he said.
‘‘He has also successfully built the profile of Treasury’s iconic wine brands internationally.’’
But there was no explanation as to why Mr Dearie was worth shareholders being asked to award him performance rights last Friday, and out the door yesterday.
