Campbell Soup named Mark Clouse, the former CEO of Pinnacle Foods, as its new chief executive on Thursday, a key step in the U.S. company's efforts to regain market share and boost profits.
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Clouse has a reputation as a seasoned food industry operator. Shares in Pinnacle Foods surged 54 percent during his tenure as CEO, widely outperforming packaged food peers, most of which have lost share value in recent years as they struggle to grow sales among increasingly health-conscious shoppers.
Reuters reported the news earlier on Thursday, citing sources familiar with the matter who said Clouse's appointment would be announced imminently.
He has the support of Campbell Soup shareholder and activist hedge fund Third Point LLC, which has been hoping Campbell Soup will eventually be sold, according to the sources. Clouse led Pinnacle as CEO between 2016 and earlier this year, when that company was sold to ConAgra Brands Inc for $8.1 billion.
A military veteran who served in the U.S. Army after having graduated from the United States Military Academy at West Point, Clouse began working in the food industry more than two decades ago. He had been chief growth officer at Oreo-maker Mondelez International Inc and previously worked in marketing at Kraft Heinz Co. Clouse will start at Campbell on Jan. 22.
By picking Clouse, Campbell Soup has made good on its promise to name a new CEO before the end of the year. It operated for months with an interim chief, Keith McLoughlin, after former CEO Denise Morrison left in abruptly in May. McLoughlin will remain a director, Campbell said.
The exact details of Clouse's compensation package as Campbell Soup CEO could not be learned. In 2017, Clouse earned $5.22 million as Pinnacle Foods CEO. In 2016, he earned $14.1 million.
Campbell shares were down 1.1 pct aftermarket at $37.27.
The company has been struggling for some time, trailing other food companies, as its stock price tumbled 20 percent in the last 52 weeks. Its foray into fresh foods faltered, its soup sales shrunk and Wall Street questioned the company's aggressive acquisitions, led by former CEO Morrison, that failed to lift profits and saddled the company with fresh debt.
"Mark was the board's top choice due to his success leading organizations through significant transformations,"Campbell said in a statement, adding that Third Point provided input into the CEO search process and supported Clouse's appointment.
The news of the new CEO comes just weeks after Campbell and Third Point settled a bitter proxy contest. Third Point initially proposed sweeping out all 12 Campbell's directors and then ended up settling for two board seats.
As part of the settlement, two Third Point nominees, marketing expert Sarah Hofstetter and food industry veteran Kurt Schmidt, were added to the board and a third director will be chosen later. The hedge fund was also given an opportunity to weigh in on who the new CEO would be, according to the settlement.
Campbell's board, including three heirs to John Dorrance, the chemist who invented condensed soup and ranCampbell's a century ago, conducted a strategic review earlier this year and agreed to sell its international and fresh refrigerated-foods units.
The Wall Street Journal had reported last month that Clouse was the leading candidate to be Campbell Soup's next CEO.
(Reporting by Richa Naidu in Chicago and Svea Herbst-Bayliss in Boston. Additional reporting by Uday Sampath Editing by Nick Zieminski and Tom Brown)