Sandvik AB, the world’s largest maker of cutting tools, ousted Chief Executive Officer Olof Faxander and named Bjorn Rosengren, currently CEO of Finnish ship-engine builder Wartsila Oyj, as his replacement.
The shift “should be viewed as a next step in Sandvik’s further development,” Sandvik Chairman Johan Molin said in a statement.
Sandvik shares gained on Monday after Swedish broadcaster TV4 reported that the company was planning to announce that Faxander, 45, would be dismissed this week. Trading was halted as shares had added 3.9 percent.
During Faxander’s tenure, Sandvik shares have underperformed peers like mining equipment rival Atlas Copco. Since he took over the top post at Sandvik in February 2011, the stock has lost about 13 percent, while the total return for Atlas’ owners was some 80 percent, including reinvested dividends.
Faxander came to Sandvik from a position as CEO of steelmaker SSAB, and was tasked with reshaping the company after a poor performance during the financial crisis. He made some controversial decisions such as moving the company’s headquarter to Stockholm from Sandviken, where it had been based for 150 years.
He struggled to reach the company’s financial targets, including 8 percent sales growth, which Sandvik hasn’t accomplished since Faxander’s first year in the job, when Swedish exporters benefited from a rebound after the financial crisis.
The dismissal comes after a major leadership reshuffle in investment company AB Industrivaerden, Sandvik’s largest owner, following reports of alleged misuse of corporate jets at Industrivaerden and hygiene products producer Svenska Cellulosa AB. Among those who had to leave in the wake of the scandal were SCA CEO Jan Johansson, Industrivaerden chairman Sverker Martin-Loef, and Sandvik’s former chairman Anders Nyren. Nyren was replaced in May by Molin, CEO of the world’s largest lockmaker, Assa Abloy AB.
Rosengren will start his position at Sandvik on Nov. 1, when Jaakko Eskola will replace him at Wartsila.