UK: Fresh concerns over SABMiller executive restructure
SAB Miller confirmed details of the changes last month
Fresh concerns have been raised over the long-term effectiveness of SABMiller's decision to change the roles within its senior executive team.
The brewer confirmed last month that current chief executive Graham Mackay will become chairman next year. The present head of European operations, Alan Clark, will take on the role of CEO.
But, in a note released today (May 15), analysts Investec raised questions over how the changes will affect the company.
“While the solution might make for an effective transition in the short term, it’s going to be difficult to our eyes for Clark to carve out the required autonomy as CEO and for SAB to benefit from the appropriate objective distance and creative tension that needs to exist between chairman and chief executive,” the note said.
“This might extract a cost around the quality and appropriateness of long-term decision-making.”
However Investec stressed that SAB Miler's retention of Graham Mackay was a “strong positive” in the short term".
“He is clearly a respected – and effective – leader of SAB. He has huge experience of the company and industry and should continue to act as a steadying hand on the tiller in the face of likely impending further industry consolidation, not least the much-speculated on possibility that AB InBev might move for SAB.”
But Investec added: “Our central concern is that it will be hard for Mackay and Clark to cultivate the appropriate, arms-length relationship that is central to the reviewing role of the Board and the executive role of the CEO.”
Investec said it had moved to a 'Buy' recommendation with a new target price of 2800p.
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