The chief executive of US confectionery giant Hershey is to leave the company at the end of the year amid speculation that he had grown frustrated with its ownership structure.
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Hershey said it had begun the search for a successor to Rick Lenny, who was elected to the three roles of chairman, president and CEO in 2001.
“Once announced, there will be an orderly transition from Rick to his successor,” said Robert Campbell, chair of the company’s compensation and executive organization committee. “We wish Rick all the best as he concludes his role with Hershey.”
Campbell said that under Lenny’s leadership Hershey “developed and has been executing its value-enhancing strategy with the over-arching goal of building stockholder value over the long-term”.
Campbell added: “Under Rick’s leadership, through a combination of core brand growth, disciplined global expansion, and improved margins, Hershey’s total stockholder return was higher than that of the S&P food group and significantly outperformed the S&P 500.”
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By GlobalDataLenny said his time at Hershey had been “extremely rewarding”. He added: “During this time, we undertook major challenges, all focused on building a strong foundation for the benefit of all our stakeholders.”
In spite of the customary, generous valedictions and tributes, there has been speculation that Lenny is stepping down because he has become frustrated with the company’s ownership structure.
The Milton Hershey School Trust, which was established by the company’s founder Milton Hershey and his wife Catherine in 1909, owns around 30% of the equity in Hershey but controls as much as 80% of the voting rights.
Many analysts contend that to take a further leap forward, Hershey should be looking at a significant merger but the trust has remained opposed to such a move.
In April, the company was linked with a possible merger with Cadbury after the latter announced its intention to de-merge its sweets and soft drinks operations. But the trust quickly put the dampeners on the idea.
LeRoy Zimmerman, chairman of the board of the Hershey Trust Company, which excercises voting rights on behalf of the trust, said that the organisation was committed to maintaining its current position on ownership.
Zimmerman’s comments on Lenny’s retirement placed more emphasis on the future.He said: “The Board of the Hershey Trust, as the long-term controlling shareholder of The Hershey Company, looks forward to working with the company to improve its performance and advance its vision for global growth.
“We thank Mr Lenny for his service to the company and the Milton Hershey School and wish him success in his future endeavours.”
