LONDON -- In a long-expected move, this morning Diageo (LSE:DGE) (NYSE:DEO) announced that chief operating officer Ivan Menezes will take over the duties of chief executive officer Paul Walsh on July 1, 2013, with a 12-month handing-over period until the latter retires from the company on June 30, 2014.
Chairman D.r Franz B. Humer commented:
Paul is an outstanding Chief Executive. He has served our business, its shareholders, employees and partners with enormous imagination and dedication over the past 13 years... The Board is immensely grateful for his ambitious and thoughtful stewardship of the business and its people. The transition process which has been put in place enables Paul to contribute his knowledge and experience during Ivan's first year as Chief Executive Officer.
Walsh's tenure has spanned 13 years -- a lot longer than many of those last at the helm of FTSE 100 companies -- and has been widely credited for much of Diageo's success, as investors who held shares since he became CEO have seen their value increase fivefold to 1,970 pence today.
The shares didn't see a big fall or gain this morning, representing the market's faith in Walsh's successor. Menezes has run several of Diageo's regional divisions, and the board has a habit of observing its future leaders in such roles. Indeed, Walsh was COO before stepping up to the CEO position.
On Menezes' appointment, Dr. Humer stated:
We are delighted to have a leader of Ivan's talents and global experience to succeed Paul. The handover is being made at a time when the business is strong and Ivan takes on the role of CEO at an exciting stage of the company's global development. The Board is confident that Ivan will inspire our organization and Diageo will continue to achieve our medium-term performance objectives.
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