O'Hoy out as Foster's moves on
SIX weeks after handing in his resignation at troubled beer and wine giant Foster's Group, chief executive Trevor O'Hoy has been shown the door by chairman David Crawford.
Mr Crawford has persuaded former Cadbury confectionery chief Ian Johnston, who only joined the Foster's board as a non-executive director in September, to come out of retirement and help run the group as acting chief executive.
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SIX weeks after handing in his resignation at troubled beer and wine giant Foster's Group, chief executive Trevor O'Hoy has been shown the door by chairman David Crawford.Mr Crawford has persuaded former Cadbury confectionery chief Ian Johnston, who only joined the Foster's board as a non-executive director in September, to come out of retirement and help run the group as acting chief executive.Foster's said in its statement that Mr Johnston would "maintain senior management focus and energise the team to drive day-to-day business performance across product categories and global businesses".The news earned Foster's a slightly better improvement in its share price than the general market yesterday, but the shares are coming off their lowest point in more than four years only a week ago. The stock finished the day 18 higher at $4.83, a 3.9% gain on a day when the overall market climbed 3.5%.Mr O'Hoy's impending departure was announced on June 10, along with a reining in of profit forecasts and a series of write-downs relating to the group's wine business - which is on Foster's books at $5 billion and seen by the broader market as overvalued.Mr Crawford is now overseeing a review of the wine business, which not only includes some of Australia's best-known labels but has a significant presence in the US through its Beringer business.Mr Johnston will help Mr Crawford in the review, which may result in Foster's selling all or part of the business to restore earnings performance and market faith.Keeping Mr O'Hoy until a replacement was found became untenable because Foster's has so many issues to deal with - not least the impact of an economic slowdown here and in the US on consumer spending on alcohol and other discretionary purchases.This is the second time 61-year-old Mr Johnston has returned to executive ranks after stepping out to become a non-executive director.Executive search firm Heidrick & Struggles was appointed in mid-June to find a replacement for Mr O'Hoy, but it may take until the end of this year for a new chief to take up the role if they are hired externally because of contractual arrangements with their existing employer. That might mean Mr Johnston is in the chief executive's chair for about four months.If his deal reflects Mr O'Hoy's pay, he will be in for a substantial rise beyond the base $140,000 a year he could expect to receive as a Foster's director.Mr O'Hoy earned $1.37 million of base pay in the 2007 financial year, plus nearly $500,000 in bonuses.KEY POINTS- Former Cadbury confectionery boss Ian Johnston will take over from Trevor O'Hoy.- Mr Johnston will help with a review of Foster's ailing wine business.
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