Nick Read is stepping down as chief executive of the Vodafone Group on December 31. He will remain as an adviser to the board through March 2023.
The company’s CFO Margherita Della Valle has been appointed interim Group chief executive, handling both roles until a new CEO is found. “She will accelerate the execution of the company’s strategy to improve operational performance and deliver shareholder value,” said Vodafone in a statement.
Read has been with Vodafone for more than two decades.
Vodafone Chairman Jean-François van Boxmeer said, “During his four years as CEO, he led Vodafone through the pandemic, ensuring that our customers remained connected with their families and businesses. He has focused Vodafone in Europe and Africa as a converged connectivity provider and led the industry in Europe in unlocking value from tower infrastructure.”
Vodafone released compensation information, revealing that Nick Read’s current base salary is
£1,081,500 ($1,136,964) per year with a bonus of maximum 200% of base, along with other incentive plans and perks. Della Valle will have her compensation raised to match Read’s.
Analyst James Ratzer with New Street Research wrote this morning: “The board has clearly decided that a new leader can deliver better performance for the company. And ultimately the performance in German fixed-line and slower M&A delivery we think are the areas where things came unstuck.”
During its fiscal Q2 2023 earnings call in November, Read reported that the company had experienced a slowdown in Europe. And he said it was taking actions such as changing its pricing plans to reflect inflation and planning to reduce its costs by €1 billion over the next 3.5 years.
Ratzer said New Street agrees with the board that the number one priority should be to improve the operational performance of the company. “We are supportive of Vodafone’s intention to lift pricing in a lot of its markets and also launch a renewed cost cutting program.”
He added, that Read leaves Vodafone in a better relative position to the mobile industry than the position he inherited.
Vodafone is currently in talks to merge with the U.K.’s Three.
But Ratzer said the biggest challenge for a new CEO will be the strategy for fixed line in Germany. “Part of this has been driven by the pandemic pressuring all German challengers versus DT, but most recently IT problems with regard to the implementation of the new Telecom Law,” he said.
From a shareholder point of view, New Street is concerned about the capital costs of more fiber and would prefer an upgrade path for DOCSIS.