Rolls-Royce Taps Daily Mail for CFO as East Extends Overhaulby
Daintith switches from tabloid publisher to jet-engine maker
Smith is second CFO in a row to depart after three years
Rolls-Royce Holdings Plc extended a yearlong shake-up of top management by appointing an executive from the Daily Mail tabloid’s publisher to oversee accounts at the embattled plane-engine maker.
Stephen Daintith, 52, will succeed David Smith as chief financial officer next year, Rolls-Royce said in a statement on Thursday. Smith, 55, is leaving the London-based manufacturer to “pursue other business interests” after three years in the post, only slightly longer than his predecessor. Daintith has spent much of his career in media, including previous positions at News Corp. and Dow Jones & Co.
Chief Executive Officer Warren East has been reworking Rolls-Royce’s highest management layers and creating new positions as he seeks to pare costs and turn the engineering behemoth into a more nimble organization capable of responding to shocks such as the collapse in oil prices. He’s streamlined the company by cutting the number of divisions to five from nine and eliminating more than 600 senior and middle-management positions.
The CFO replacement emphasizes “the CEO’s determination to inject more pace into the transformation of Rolls-Royce,” said Sandy Morris, an analyst at Jefferies in London. “The senior management team is likely to have to go at some lick for some years, so it is essential to have a team that can sustain that.”
The U.K. manufacturer has suffered amid stuttering demand for engines that power regional planes, business jets and older wide-body aircraft. Sales of Rolls-Royce’s marine engines have also collapsed following the oil-price slide, and the company is at a critical stage of a ramp-up in production of a new series of turbines for the latest generation of Airbus Group SE and Boeing Co. airliners.
Rolls-Royce rose as much as 1.7 percent and was trading up 1.2 percent at 734.5 pence as of 1:34 p.m. in London, reversing a decline earlier in the day. The stock has jumped 29 percent this year, valuing the company at 13.5 billion pounds ($17.7 billion).
Top executive changes have included the naming earlier this month of Simon Kirby, previously head of the U.K.’s High Speed 2 railway, as Rolls-Royce’s first chief operating officer, as well as the appointment late last year of a new civil-aerospace division chief and the split-up of the marine and power-systems business into separate units.
The manufacturer has also set up a transformation team to oversee restructuring and appointed a chief of staff. It’s searching for a new marketing and strategy director and a head of digital operations to lead a push into so-called big-data analysis, a spokesman said by e-mail.
Daintith’s “deep understanding of international business and his record of achievement in change management are particularly relevant to Rolls-Royce as we build our business and respond to the growing global requirement for our technology,” East said in the statement.
The CEO is also revising Rolls-Royce’s financial-disclosure policies following five profit warnings, including two since he took office in July 2015. East’s revisions to guidance have marked an attempt to make a clean break from his predecessor, John Rishton, who clashed with investors over earnings transparency and key strategy decisions.