The Men Who Run Unilever

LONDON -- Management can make all the difference to a company's success and thus its share price.

The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.

In this series, I'm assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today I am looking at the Anglo-Dutch consumer staples company Unilever (ISE: ULVR.L) (NYS: UL) .

Here are the key directors:



Michael Treschow

(non-exec) Chairman

Paul Polman

Chief executive

Jean-Marc Huet

Finance director

Unilever has a dual-company structure -- Dutch and U.S. investors have shares in Unilever NV, while U.K. investors have shares in Unilever plc -- but both boards appoint identical directors and effectively operate as a single board.

A Swedish industrialist, Michael Treschow is a former chairman of telecommunications firm Ericsson and white-goods manufacturer Electrolux, where he also served as CEO for five years from 1997. In that role he was credited with turning the company around, simultaneously cutting costs and building the brand. He had previously also been CEO at Swedish industrial conglomerate Atlas Copco.

His appointment as chairman of Unilever in 2007 was the first time the board had appointed a candidate from outside the company. Though it appears to have been Treschow's first engagement with consumer business, his independence and turnaround experience were important for Unilever at a time when the business was struggling somewhat.

Paul Polman was appointed CEO in 2009. He too was the first outsider appointed to the post, and was a surprise appointment with four strong internal candidates overlooked. He worked at Procter & Gamble for 27 years, rising to be group European president, and then spent three years at Nestle as CFO and head of the Americas.

A former investment banker, Jean-Marc Huet was previously CFO of Royal Numico, the Dutch baby-food company, and was voted Dutch CFO of the year in 2007. He also served as CFO of Bristol-Myers Squibb from 2008 to 2009. He joined Unilever as CFO in 2010.

Three women
Unilever's nine non-executives have backgrounds in business, science, and politics, but look a little light on finance. Surprisingly, only three of the 12-strong board are women.

Unilever has come in for some criticism for generous pay, and for the golden hello paid to Jean-Marc Huet, but it has at least introduced claw-backs on its long-term incentive scheme.

I analyze management teams from five different angles to help work out a verdict. Here's my assessment:

1. Reputation. Management CVs and track record.

Very strong.

Score: 4/5

2. Performance. Success at the company.


Score: 3/5

3. Board Composition. Skills, experience, balance.


Score: 3/5

4. Remuneration. Fairness of pay, link to performance.


Score: 3/5

5. Directors' holdings, compared to their pay.


Score: 4/5

Overall, Unilever scores 17 out of 25 -- a middle-order result. The company's executives look competent and have performed well, but the composition of the board has a quirky feel to it.

I've collated all my FTSE 100 boardroom verdicts on this summary page.

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Tony Reading owns shares in Unilever but no other companies mentioned in this article.The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Procter & Gamble and Unilever. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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