Ericsson’s Top Shareholder Says CEO Search is Main Priority
Ericsson’s biggest shareholder is throwing its weight behind calls to find a new chief executive officer for the Swedish network equipment maker, according to Bloomberg.
Ericsson, which has been run by its chief financial officer since Hans Vestberg was fired from the top job in July, has delivered its owners a series of blows in recent months. After shocking markets with a profit warning that wiped 20 percent off Ericsson’s value on a single day, the company must focus on finding the right candidate, someone with a long-term perspective, Johan Forssell, CEO of Investor AB, said on Wednesday.
“It needs to be a good leader, someone with strategic abilities, considering the large technology shifts that are happening in this industry,” Forssell said in an interview. “It’s also an advantage to have the ability to understand the technology.”
When Ericsson last week revealed a 14 percent slump in revenue and said savings plans aren’t enough to keep up with the bleak development in sales, the message was delivered by Jan Frykhammar, who’s been interim CEO since the board ousted Vestberg. The former CFO has said he doesn’t want to stay in the job permanently, but recruiters looking for a successor have yet to find someone ready and willing to take on the beleaguered Stockholm-based company.
“Uncertainty is never a good thing in a company,” Forssell said. “It’s important to find the right person at the right time. Obviously you want that to happen as soon as possible but it’s even more important to find the right person.”
Ericsson declined 0.3 percent to 48.24 kronor at 2:34 p.m. in Stockholm, giving the company a market value of 161 billion kronor ($18 billion).
Swedish business daily Dagens industri on Wednesday reported that several candidates have declined offers for the top position at Ericsson. By the end of last week, after Ericsson published some third-quarter results early, the company’s shares were trading at their lowest since 2008. It’s due to release full quarterly results on Oct. 21.
Ericsson is facing a tough demand situation, with added challenges from large technology shifts, Forssell said, adding that Investor AB will back up management until a new CEO is in place.
“During this period it’s important for the board to support the interim CEO and the management in the important tasks that they have to handle,” Forssell said.
Investor AB, the publicly-traded holding company of the Wallenberg family, has about 22 percent of the voting rights in Ericsson. Investor AB shares control of Ericsson with Industrivaerden AB, a Stockholm-listed holding company run by chairman billionaire Fredrik Lundberg.