Vodafone boss Nick Read ousted as shares slump to 20 year low

Vodafone’s CEO has been ousted after a turbulent year in which shares fell to a 20-year low.

Nick Read, who has led telecoms group FTSE 100 since October 2018, will step down at the end of this month.

The 58-year-old will be replaced on an interim basis by chief financial officer Margherita Della Valle, while Vodafone is looking for a permanent replacement.

He will remain with the group as an advisor until the end of March.

His fate was sealed at a board meeting on Sunday night as investors grew increasingly frustrated with a share price slump below 100 pence. The stock is down 45 percent since he took charge.

“I agree with the board that now is the right time to pass the baton to a new leader who can build on Vodafone’s strengths and seize the significant opportunities ahead,” Read said yesterday.

But one of the company’s largest shareholders, billionaire Xavier Niel, said a CEO change wouldn’t be enough to revive the company.

Niel, who founded French operator Iliad and owns 2.5 percent of Vodafone, said a new boss “only makes sense if the new CEO has a clear roadmap from the board,” including streamlining the company and selling it of infrastructure to reduce debt and increase profit margins.

Niel added that he was ready to help the company formulate plans to achieve these goals, according to the Daily Telegraph.

Read will receive his salary and allowances until March 31 and will receive extra amounts instead of salary until December 5 next year, when his notice period expires. In 2021, he received a base salary of just over £1 million.

Read will continue to be eligible for an annual bonus and share awards, so he could walk away with an amount in excess of the £4.2 million he brought in this year.

The company has also agreed to pay the CEO £7,000 for legal costs and a further £50,000 for Read to hire a headhunter to find a new position.

Shares rose slowly after news of Read’s departure, but ended the day up 0.1 percent, or 0.12 pence, to 91.02 pence.

His departure follows a difficult year for Vodafone. Read is under pressure to streamline the company by selling assets while improving performance and stock price.

But Vodafone cut its full-year forecast last month after a weak performance in its main German market.

Another bad omen was when Cevian Capital, an activist investor championing change at the group, cut its stake in October in an apparent admission that it had given up.

Other issues linked to Read’s ouster included concerns over the complexities of Vodafone’s recent deal to sell part of its stake in Vantage Towers, which has 83,000 branches in ten countries in Europe, including the UK, to buy a . joint venture with New York. based investors Global Infrastructure Partners (GIP) and private equity group KKR.

“With the stock languishing at its lowest level in more than 20 years, it’s hard to describe Read’s tenure as anything other than a disappointment,” said AJ Bell investment director Russ Mold.

He added that while Read faced “exceptional challenges” – including the Covid-19 pandemic and rising inflation – he struggled to convince the market and his employers that he had a strategy to revive Vodafone’s fortunes blow.

Berenberg analyst Carl Murdock-Smith said that while Read’s departure “didn’t come entirely out of the blue,” the news was still surprising as the Vantage Towers deal and talks of a merger with rival British mobile were predicted to be over. network Three would have eased the pressure. on the controversial CEO.

But the news would likely be positive for the stock, as investors hoped that Read’s permanent successor would be “more sincere in driving structural change.”

Market chatter will now focus on who could succeed Read at the top of the telecom giant. Those believed to be in the running have existing connections to the company, including Stephen Carter, boss of exhibition organizer Informa, who sits on Vodafone’s board as a non-executive director. Another is Nick Jeffery, former head of Vodafone’s UK operations, who heads US telecoms group Frontier Communications.