Farewell Vestberg: Share price up as Ericsson chief exec steps down, effective immediately
Ericsson's chief executive is stepping down from his role, effectively immediately, to make way for a fresher outlook, the company announced today.
Hans Vestberg, who has been with the company for almost 30 years including seven at the helm, will be leaving all assignments as of today but will be on call during the next six months.
"Hans has been instrumental in building strong relationships with key customers around the world and his leadership and energy have been an inspiration to employees and leaders across Ericsson," said chairman of the board Leif Johansson.
"However, in the current environment and as the company accelerates its strategy execution, the board of directors has decided that the time is right for a new leader to drive the next phase in Ericsson's development."
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Vestberg added: "As the industry enters a next phase, driven by 5G, the Internet of Things and Cloud, it is time for a new chief executive to step in and continue the work to ensure Ericsson's industry leadership."
Unfortunately for Vestberg, the market seemed to agree the company needed somebody new to steer the course. Shares are trading up 5.1 per cent at 66.60 Swedish Krona at time of writing.
Vestberg has also resigned from his position as president and will no longer be a member of the board of directors.
The search for a new chief executive is underway but Jan Frykhammar, who is currently the finance chief and executive vice president, will take on the role in the interim. The search for a new boss for the company will consider both internal and external candidates.
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Johansson commented: "Jan has made it clear that he is not aspiring to permanently take on the chief executive role. However, I am very pleased that he has accepted this assignment."
Meanwhile, Carl Mellander, currently vice president and group treasurer, has been appointed acting finance chief to take over from Frykhammar.
Commenting on the announcement, Neil Campling, head of TMT Research for Northern Trust Capital Markets, noted the shakeup at the top was not unexpected given the "frustration" reported among major shareholders.
"The continued poor execution, what feels like perpetual – and, frankly unsuccessful – restructuring and poor stock performance has resulted in the chief executive having to leave," Campling continued. "Clearly the company doesn't have a quick fix or back up plan given the search for a new chief executive is just starting but the removal of the chief executive we thought would be taken well by the market as a positive first step."