Osram to Replace CFO Patzak After Board Clash Over Strategyby and
Exit comes amid battle with shareholder and ex-parent Siemens
Patzak used to work at Siemens, which opposes LED investment
Osram Licht AG said Chief Financial Officer Klaus Patzak will leave over a clash with fellow board members about the company’s new strategy, one that’s been criticized by biggest shareholder and Patzak’s former employer Siemens AG.
The unexpected move ends Patzak’s Osram career five years after he joined the German lighting manufacturer from Siemens, which spun off the company in 2013 and still holds a 17 percent stake. A process to find a replacement CFO is under way, with Patzak to remain in the job until the search is completed, Munich-based Osram said in a statement on Tuesday. The stock fell as much as 4.3 percent in Frankfurt trading.
Patzak’s exit “will be taken cautiously by the market considering investors’ generally positive perception” of him, Morgan Stanley analyst Lucie Carrier wrote in a note to clients. The move shines a spotlight on an internal debate over a decision to invest in the growing market for LED chips, she said.
In a bitter and public dispute, Siemens has accused Osram and specifically Chief Executive Officer Olaf Berlien of destroying shareholder value with what it considers an unprofitable strategy, including a 1-billion euro ($1.1 billion) investment in a new Malaysian LED chip-making plant. Siemens CEO Josef Kaeser, a former colleague of Patzak’s, complained in December that the value of his company’s investment had fallen by about 260 million euros following the announcement of the new approach.
The spat between the two companies reached a climax at Osram’s annual shareholder meeting in February, when a Siemens representative said the company wanted to oust Berlien. Other investors did not seem to share the view, as the subsequent vote on Berlien’s position heavily endorsed the CEO. Patzak won 97 percent approval in the equivalent poll on his position as CFO.
Osram shares declined 3.4 percent 46.66 euros as of 3:15 p.m. local time, paring the year’s gain to 18 percent. That values the company at 4.8 billion euros.
Patzak and Kaeser worked side by side for at least five years prior to Patzak’s move to Osram. He held various positions in Siemens’ corporate finance department, which was run by Kaeser from 2006.
At the meeting in February, investor representative Caterina Steeg from the VFA Association for the Promotion of Shareholder Democracy raised doubts over Patzak and Kaeser’s relationship, asking the CFO repeatedly whether he is committed to the company’s strategy.
A spokesman for Siemens declined to comment on Patzak’s exit. An Osram spokesman said the company wouldn’t comment beyond the statement.
Osram also named Stefan Kampmann as chief technology officer from July 1. He will be in charge of research and development, technology and innovation.
Osram said that the supervisory board worked in “close consultation” with Berlien in the appointment of former Robert Bosch GmbH employee Kampmann and that it shows support for the CEO’s strategy. The company is focusing on three areas -- specialty lighting, luminaires and electronic components, and LEDs.