FRANKFURT (Reuters) - Thyssenkrupp (TKAG.DE) said on Tuesday it will start talks soon to end the contract of current Chief Executive Guido Kerkhoff, whose brief tenure at the submarines-to-car-parts group included four profit warnings and two failed restructuring efforts.
The move is the latest sign of turmoil at the steel-to-elevators conglomerate, which is trying to restructure itself by selling or listing all or parts of its elevator unit, by far its most profitable business.
It comes after mounting scepticism over Kerkhoff’s ability to turn around the group, with shares having fallen 40% since he took over as CEO in July 2018, hitting their lowest levels since 2003 last month.
Under Kerkhoff’s tenure, Thyssenkrupp cut earnings outlooks four times, dropped out of Germany’s benchmark stock index and scrapped plans to spin off its capital goods business and efforts form a joint venture with Tata Steel (TISC.NS).
“The personnel committee of the supervisory board of Thyssenkrupp AG recommends to the supervisory board to start negotiations to end the board mandate of Guido Kerkhoff shortly,” Thyssenkrupp said in a statement.
Thyssenkrupp did not elaborate on the decision, but said it would propose current Supervisory Board Chairwoman Martina Merz, who has been in the job since February, as interim CEO for no longer than a year.
If Merz, a former Bosch [ROBG.UL] manager, is elected interim CEO by the supervisory board, fellow board member and former Siegfried Russwurm will take over her duties as chairman on an interim basis, Thyssenkrupp said.
The company said it would also recommend that Klaus Keysberg, currently head of the group’s Materials Services business area, join its management board.
The supervisory board will decide on the proposals at an extraordinary meeting shortly, the company said.
Kerkhoff, who joined Thyssenkrupp as finance chief in 2011, took over as CEO last year following tumultuous weeks during which the conglomerate’s former CEO and chairman departed due to mounting investor pressure over strategic issues.
The 51-year old had been given a five-year contract a year ago. His departure is unlikely to cause a strategic shift for the group, which earlier this year had admitted that some of its units would be better off under different owners.
“The realignment of the group announced in May 2019 and unanimously approved by the Supervisory Board will be systematically continued. The focus will be on the three areas ‘performance first’, ‘flexible portfolio’ and ‘efficient organization’,” the company said.