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French energy giant Engie ousts CEO
FRANCE
Some of the board were unable with the company’s direction.
THE board of French energy giant Engie has ousted CEO Isabelle Kocher, following months of board infighting over the company’s direction.
Kocher, an Engie veteran, made headlines when she took the gas and power utility’s helm in May 2016, becoming the first female CEO of a French blue-chip company. Her immediate pri- ority was getting Engie back into the black after it booked €4.6bn ($5.04bn) in losses in 2016.
Engie finally returned to profit in 2017, with the help of a €13.2bn divestment strategy which also involved shifting the company away from fossil fuels and increasing its focus on power grids, renewable energy and energy services.
There are those that are unhappy with the course Engie has taken over the last four years, however. Among them are board members rep- resenting the French state, which has a 24% stake in the company, according to reports in the local press in recent months.
Engie’s board took the decision not to renew Kocher’s contract as CEO in a meeting on Febru- ary 6, meaning she will step down in May.
“Following a decision-making process based on a detailed assessment of her tenure, the board of directors concluded that further development of the group’s strategy required a new leadership,” Engie said in a statement after the meeting.
Kocher has faced criticism from the govern- ment for selling coal and gas assets too cheaply, destroying Engie’s value. Her decision in 2017 to transfer the company’s LNG export and trading business to France’s Total drew particular ire.
Critics also say that under her tenure, Engie’s share price has lagged behind those of its com- petitors, and its power generation and gas infra- structure businesses – responsible for 80% of profits – have underperformed.
Conversely, Kocher has also been attacked
for not taking the company’s transformation far enough.
Chairman Jean-Pierre Clamadieu told France’s Les Echoes newspaper after the board meeting that Kocher “did not manage to demon- strate that she was the right person to deepen the group’s transformation.”
Engie’s various businesses have little synergy between them. They range from a labour-inten- sive energy services division to a capital-inten- sive gas infrastructure unit and fast-growing clean energy arm. The company also operates legacy nuclear capacity in Belgium, which wants to phase out atomic energy.
Fund investors have long argued that Engie’s shareholders would be served better if the com- pany was broken apart, or at least that its infra- structure and clean energy assets be taken public separately. Kocher has repeatedly opposed such moves. She has also resisted calls for Engie to divest its remaining gas assets, including storage unit Storengy, even though doing so would help streamline its portfolio.
“In order to enhance the profile and maxim- ise the growth potential of each of its activities, the group must continue to simplify its organi- sation, clarify its strategic options, and boost its business model in renewable energies and cli- ent solutions,” the board said. “The group must also address critical challenges in Belgium and France, namely how nuclear energy fits into the Belgian energy mix and natural gas in the French one.”
Clamadieu will be tasked with the search for a new CEO, which will begin immediately, Engie said, while general secretary Calire Waysand will be appointed interim CEO. In the meantime, operational management will be handled collec- tively by Waysand, COO Paulo Almirante and CFO Judith Hartmann. ™
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