Swedish mobile telecoms gear maker Ericsson ousted Hans Vestberg as chief executive on Monday, a move led by major shareholders after months of criticism of Vestberg's leadership and pay.
Chief financial officer Jan Frykhammar was named acting chief executive while the company searches for a successor to Vestberg, chief executive since 2010, who leaves immediately.
Vestberg, who had served longer than any of his three predecessors, had come under fire in recent months, with Swedish media questioning his leadership and pay, particularly after weak quarterly results in April sent its share price down 15 per cent in a single day.
Spokespeople for investment companies Investor AB and Industrivarden, Ericsson's largest shareholders, said they were behind the board's move to let Vestberg go but declined to comment further.
Unanimous decision
Investor spokesperson Stefan Stern said Ericsson's board had been unanimous in its decision on Sunday evening.
Ericsson shares rose as much as 5.9 per cent on the news and were up by 4.8 percent by 7.57am.
In a statement, chairman of the board Leif Johansson commended Vestberg for inspirational leadership of Ericsson during years of big change for the industry and the company and for building strong relations with clients.
“However, in the current environment and as the company accelerates its strategy execution, the board of directors has decided that the time is right for a new leader to drive the next phase in Ericsson’s development,” Johansson said, adding the board would look at both internal and external candidates.
The chief executive's departure comes days after the company announced additional cost cuts as like-for-like sales declined for a seventh consecutive quarter amid a difficult situation for its industry with falling demand for its core products. Last week, business daily Dagens Industri reported the two top shareholders had decided to find a new chief.
"I personally think we will see an external CEO. It brings a lot of contacts and know-how from the outside," said Swedbank analyst Mathias Lundberg.
Sports role
Vestberg has also faced criticism for his use of a corporate jet to attend sports events and for taking on the role as chair of Sweden's Olympic Committee (SOC) at a time when Ericsson is slashing costs and rejigging its strategy. Vestberg has said his trips were with clients and in line with company police and that his SOC role would not affect his job as chief executive.
Adding to Vestberg's woes, Swedish daily Svenska Dagbladet in June said US authorities were investigating the company over possible corruption in its China business, shining new light on an inquiry which Ericsson said dated back three years without giving detail on which countries were currently being investigated.
Group treasurer Carl Mellander takes over as acting chief financial officer.
Reuters
