ABB Ltd. Chief Executive Officer Ulrich Spiesshofer abruptly left the Swiss engineering company after failing to placate shareholders with a plan to hive off the power grids business.
Chairman Peter Voser will take on the role in the interim during the search for a successor, ABB said in a statement Wednesday, adding that Spiesshofer and the board “mutually agreed for him to step down” after being in the job since 2013. The shares rose as much as 4.7%, the biggest jump in more than four months.
Spiesshofer’s unexpected departure comes after he announced the sale of ABB’s power-grid division to Hitachi Ltd. for about $6.4 billion in December, leaving the Swiss company more focused on robotics and automation. The breakup pushed by activist investor Cevian Capital was long resisted by the outgoing CEO, and on Tuesday another shareholder Artisan Partners urged the manufacturer to go a step further by splitting out its electrification business.
“We will continue to focus on implementing ABB’s strategy and delivering value to all our stakeholders,” Voser said in the statement. “To achieve our key financial targets, we will proceed with the divestment of ABB’s Power Grids business as planned, simplify the organizational structure of the group and deliver cost savings.”
Cevian Capital, which holds a stake of about 5.3%, on Wednesday reiterated its backing of ABB’s strategy and said it has “full confidence” in Voser and the management team to “continue implementing the transformation.”
The total annualized return of the shares during Spiesshofer’s 5 1/2 years as CEO was just 2.2% compared with a peer group return of 12%, Bloomberg data shows.
ABB on Wednesday also published first-quarter results that met analyst estimates. Operational earnings before interest, taxes and amortization rose 10% to $766 million while orders were little changed at $7.61 billion. Chief Financial Officer Timo Ihamuotila said in a release that the separation of power grids is “well on track” and business in the core divisions in the current period is as expected.
By Jan Dahinten