Yahoo Finance Compass boss Richard Cousins to retire after 11 years at helm of catering giant
Richard Cousins, chief executive of FTSE 100 catering giant Compass, is to step down after more than a decade in the role during which he brought the firm back from the brink and turned it into one of the most successful constituents of the index.
Mr Cousins will hand over the reins on March 31, and leave the company the following September when he will retire.
During his time at Compass its shares have recorded a seven-fold increase and shareholders have received £9bn in dividends and share buybacks.
Such is the regard in which Mr Cousins is held that Compass's shares fell on Thursday on the back of the news of his departure, which analysts attributed in part to concern about the level of churn in the top ranks of the food and services sectors.
Mr Cousins is the fifth chief executive in the sector to depart this year, following Richard Salomons from IHG, Michel Landel of Sodexo, Philippe Salle of Elior and Breon Corcoran of Paddy Power Betfair.
“We would expect the shares to react negatively given management change precedents in the sector,” Jaafar Mestari of JP Morgan Cazenove warned.
Mr Cousins will be replaced by Dominic Blakemore, Compass’s chief operating officer for Europe, who will become deputy chief executive on October 1 before moving into the chief executive role next year.
Mr Blakemore has effectively been auditioning for the job in his capacity as European head, having previously been the firm’s finance director, and his appointment was heralded as a carefully planned manoeuvre which will continue Compass’s current growth plan.
Mr Cousins has been praised for his strategy of pursuing steady organic growth rather than major acquisitions, using cash to reduce debt or to make payments to shareholders. He oversaw the sale of a number of non-core businesses and made the decision to focus solely on food services.
Tim Ramskill, analyst at Credit Suisse, said: "The fundamentals of the business model and its clear disciplines around capital and efficiency will not change in our view.”
A note from Berenberg added: "While clearly the roadmap was implemented and created by Mr Cousins, the success of Compass has also been built on a culture that has cascaded through the organisation and been embraced by its senior decision makers. We are not expecting this to change."
Mr Cousins' departure is something of a defining moment for Compass which has enjoyed years of solid growth.
When he took over in 2006, Compass was embroiled in a scandal over alleged corrupt bidding for contracts to supply the United Nations.
Its name was further muddied by chef Jamie Oliver’s campaign against Turkey Twizzlers being served in schools. Compass was the firm responsible for serving the food to children, although it later overhauled its menus to offer healthier options.
When Mr Cousins took over Compass’s share price stood at 236p; last night it closed at 1612p.
Mr Ramskill of Credit Suisse said: “Whilst we wouldn’t wish to be accused of hyperbole, we consider Richard’s tenure as chief executive of Compass to be nothing short of exceptional.”
His efforts have not been without reward: according to the firm’s annual report, he took home £5.8m in salary, bonus, share options and pension in 2016.
Earlier this year the company reported pre-tax profits of £831m in the six months to March 31, up from £666m a year previously, and said shareholders were on track to enjoy a £1bn special dividend.
Mr Cousins also hit the headlines earlier this year when he resigned from the board of Tesco as an independent non-executive director in protest at its plans to buy wholesaler and food service supplier Booker. He had been widely tipped to become the supermarket’s chairman.
Paul Walsh, Compass’s chairman, said Mr Cousins had "transformed" the company, and generated "significant returns for our shareholders.”
Mr Cousins added that it had been a “privilege” to lead the company.
