Rolls-Royce Group Plc Chief Executive Officer John Rose, who turned the company into the world’s second-biggest aircraft engine maker, will retire next year and be succeeded by Royal Ahold NV CEO John Rishton
Rose, who has led the company for 14 years, will leave at the end of March, according to a statement today. Rishton is a non-executive director at Rolls and a former British Airways Plc chief financial officer. Ahold said in a separate statement that Dick Boer will take the top job at the Dutch retailer.
The announcement of Rose’s departure comes as Rolls-Royce grapples with malfunctions on its Trent 1000 aircraft engine, including a failure on a test bed in Derby, England, last month and power surge on a Boeing Co. 787 Dreamliner aircraft. Boeing was forced to push back delivery of the 787 into the middle of the first quarter, partly blaming Rolls for the latest delay.
“It’s been an extraordinary story,” said Sandy Morris, an analyst at Royal Bank of Scotland Plc. “Rolls was a long-way number three,” behind General Electric Co. and Pratt & Whitney.
Rolls-Royce fell 8.5 pence, or 1.4 percent, to 603.5 pence in London, where the company is based, valuing it at 11.2 billion pounds ($18 billion). Ahold fell 1.6 percent to 9.89 euros in Amsterdam.
Rose swelled Rolls’s order book to 58.3 billion pounds last year from 10.4 billion pounds in 1998, said Morris, who rates the stock “buy” and has a target price of 700 pence.
“Since joining the board John Rishton has gained a deep understanding of Rolls-Royce and established an excellent relationship with the management team,” Chairman Simon Robertson said in today’s statement. “He has a proven track record as a chief executive of a global company and has a background in aerospace and manufacturing.”
Rishton will start with similar terms to Rose, including an 850,000-pound salary, Rolls said. He will also receive shares worth 2.8 million pounds as part of a “special grant” to match incentives he forfeits on leaving Ahold.