Shareholder revolt leads to Stock CEO resignation

Stock Spirits Group’s CEO Chris Heath has stepped down from the company with immediate effect following shareholder calls for his removal.

Chris Heath, CEO of Stock Spirits, has announced his early retirement as a result of a shareholder revolt

Heath will take early retirement after two shareholding companies expressed concern in the CEO’s strategy for Central and Eastern European drinks producer Stock Spirits and called on the company to find a “suitable successor”.

The firm’s main shareholder Western Gate Private Investments Limited, which has a 9.7% stake, and Templeton Emerging Markets Group, which owns a 4.2% stake, urged Heath to resign.

The shareholders cited a number of concerns including declining market share in Poland, an “under-performing” share price, and “spiralling” corporate costs.

While Heath initially attempted to suppress the internal revolt by insisting that his “root-to-branch” company review was “delivering results”, he has now announced his departure from Stock Spirits with immediate effect.

“Stock Spirits is a great company with excellent brands and some extremely talented people who I have been privileged to work with,” he said.

“I have thoroughly enjoyed my eight years with the company and seeing it grow into the established, publicly listed business it is today. We created some amazing award winning brands, supported by world-class production facilities and an outstanding distribution network.

“The board and I have been reviewing group succession plans for some time and we felt that now was the right time for a change of leadership. I am now very much looking forward to spending more time with my family and friends and wish the company every success going forward.”

Heath, 55, joined Stock Spirits in 2007 as chief financial officer and was appointed group CEO in 2009. He was previously CFO and commercial director of Gondola Holdings plc.

Interim CEO 

Miroslaw ‘Mirek’ Stachowicz, an independent non-executive director of Stock Spirits since November 2015, will serve as interim CEO “until a suitable replacement is found”.

Stachowicz currently serves as non-executive vice-chairman of Harper Hygenics SA and non-executive director of CCC, both of which are listed on the Warsaw Stock Exchange.

David Maloney, chairman of Stock Spirits, said the board had been discussing a change of leadership for several months, and blamed Western Gate for “interrupting” the process.

“The board and nomination committee have been discussing executive succession plans for several months and I appointed an international search firm in early February this year to help identify a new CEO,” he said. “I also discussed this directly with Chris.”

“Our plan was to ensure that we had a new Polish managing director in place before initiating any other changes to avoid further uncertainty.

“We were delighted to announce the appointment of Marek Sypek as managing director, Poland last week. But Western Gate’s actions have clearly interrupted our careful planning and so we decided to accelerate the CEO process.”

In 2015, the Stock Spirits’ operating profit plummeted 22% to €41.7 million, as total revenue dropped almost 11% to €262.6m due to tax hikes in Poland and “severe pressure” from competitors.

However, in response the shareholder criticism, last week the group issued a positive trading statement outlining a 29% increase in total revenue from 1 January to 31 March 2016.

“I would like to thank Chris for his contribution as CEO,” added Maloney. “He has brought great personal qualities and values to his leadership role and driven the business forward against a background of considerable industry turmoil and change.

“Whilst there is much more to do, the decisive actions Chris and the board took last year are clearly starting to take effect as was clear from our Q1 trading statement last week. We wish Chris well for his retirement.”