The Financial Times reports that British American Tobacco has undergone a significant shakeup of its board of directors, including the creation of a chief operating officer position and the movement of six high-level executives. This move aims to accelerate the company's transition towards e-cigarette and other products, as well as to revive growth in the American market.
In this recent restructuring, two long-time executives at British American Tobacco, Johan Vandermeulen and Kingsley Wheaton, will see their influence expanded. This comes after the board abruptly fired CEO Jack Bowles, who had been in the role for four years, and arranged for CFO Tadeu Marroco to take his place.
Vander Molen will assume the newly established position of Chief Operating Officer, overseeing regional operations of tobacco manufacturers, including Reynolds American, headquartered in the US. Meanwhile, Whitten will be the Chief Strategy and Growth Officer, responsible for driving the tobacco giant's e-cigarette business and ESG (Environment, Social, and Governance) strategy.
According to Rae Maile, the tobacco analyst at Panmure Gordon, the recent restructuring is a reflection of Marlboro's efforts to support the Lucky Strike and Dunhill brands. Maile said, "This is a team that will support him in achieving his goals." She also added, "The board structure was too complex and this restructuring is a necessary simplification.
As part of the restructuring, executives responsible for British American Tobacco's subsidiary in the United States, Reynolds American Inc., and the company's new product division (including their popular Vuse e-cigarette device) were directly dismissed.
Mel remarked that investors may welcome this "updated approach." Previously, shareholders expressed dissatisfaction with British American Tobacco's slow progress in transitioning to reduced-harm products, such as e-cigarettes, which account for approximately 14% of the group's revenue. In comparison, American competitor Philip Morris International's proportion exceeds one-third.
In addition, earlier this month, Marlboro acknowledged in a trading statement that the cigarette sales of British American Tobacco in the US (which accounts for over a third of the group's revenue) were "disappointing" and the company's market share in cigarette sales had decreased by 0.4%.
The stocks of the London-listed corporation remained mostly unchanged in early trading.
David Waterfield, currently the President of the Western Europe region for British American Tobacco, will take on the role of President and CEO of Reynolds in early July. Luciano Comin, who previously oversaw British American Tobacco's operations in the Americas and Sub-Saharan Africa, will become the Director of Marketing for combustible and new products. All hiring and promotions were conducted internally within the company.
In a statement, Maroko emphasized the crucial role of management restructuring in his efforts to reform the tobacco manufacturer, stating that it allows for performance and transformation to happen simultaneously.
After agreeing to pay a $635 million fine to settle violations related to North Korean sanctions, he assumed the chief position not long after in British American Tobacco.
British American Tobacco has restructured its board following the appointment of a new chief executive. The move is part of a wider strategy shift for the tobacco giant.
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