Rather unexpectedly, the leadership at the top of Conagra (CAG 1.60%) has changed. The veteran food company announced it had appointed a new CEO, replacing a man who had held the position for 11 years. Such a move reminded many investors that the company has been struggling and might be in for more pain, so they collectively traded out of the stock to leave it with a 4% slide on the day.
New boss incoming
Before market open that morning, Conagra announced in a press release that it was replacing Sean Connolly as CEO with John Brase. The appointment will become effective on June 1. Connolly will vacate both his CEO role and his seat on the company's board of directors; Brase is to replace him as a board member, too.
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The outgoing leader joined Conagra in March 2015.
Brase is a seasoned food industry veteran, most recently serving as COO of another storied conglomerate in the sector, J.M. Smucker for over six years. Prior to that, he had a 25-year stint at Procter & Gamble, where he rose to become the general manager of the sprawling company's North America family care business.
NYSE: CAG
Key Data Points
Time for a change
Investors tend to feel a little nervous whenever a CEO is replaced without much or any warning. This applies in Conagra's case, despite language in the press release about its "thoughtful approach to succession planning."
I'd look at this development positively. To me, it shows the company recognizes it needs, at a minimum, a shake-up in the executive ranks and probably a new strategic approach. Its performance hasn't been impressive, and its portfolio, stuffed as it is with packaged foods largely out of fashion with today's more health-conscious shoppers, doesn't inspire confidence.
Ultimately, I think, this is a wait-and-see situation with Conagra stock. I'd keep an eye on any change in strategy from Brase and his team
