When the long-time, popular Chairman and CEO of an industrial manufacturer announced plans to retire, the board of directors asked SMA to develop a communications plan that would ensure a smooth transition and generate the support of the company’s long-term shareholders.
Client Challenge
Effectively communicate the leadership transition to the investment community to alleviate investor uncertainty and garner support for the successor
After two decades as Chairman and CEO of a company founded by his father, the executive decided it was time to retire. The board had prepared a succession plan and tapped a successor. But directors also wanted to communicate the transition in a strategic manner, to address any uncertainty about the change and build investor support for the new outside CEO.
The Sharon Merrill Advantage
Systematic planning and communications through a series of disclosures and introductions
SMA planned and drafted a sequence of press releases announcing: the successor’s hiring as Chief Operating Officer; the board’s plan to appoint him as CEO upon the current CEO’s retirement; and the planned retirement of the long-time chief executive. In addition, we conducted “Capital Markets Readiness” training for the new leader and provided executive presentation coaching. He participated in earnings conference calls and investor conferences well in advance of his appointment. Two months after his tenure as CEO began, we organized an Investor Day to unveil his new strategic plan for the company.
The goal of the communications strategy was to present a thoughtful, orderly transition and establish investor relationships with the new CEO in advance of him taking the position.
Results
Overwhelming investor support of the new CEO and his new corporate growth strategy
The new CEO received high marks following his coming-out party at the Investor Day, with both the buy side and sell side supporting his strategic vision. Following the event, multiple sell-side analysts committed to initiating coverage of the stock. In the six months following the transition announcement, the company’s stock price increased by 16%.
