Ericsson chairman Leif Johansson loose after the telecom giant’s many failures, according to several sources. Photo: Maja Suslin / TT
The head of Ericsson Hans Vestberg hasty exit this summer looks to be just the beginning of changes within Ericsson. The shareholders of investment companies Industrivärden and Investor spearheaded forced to act now to reverse the trend in the company which is very heavily criticized. Discontent is high both in the stock market and internally in the company.
Now, great owners also replace Ericsson Chairman Leif Johansson, said several sources SvD Business. It is primarily Industrivärden’s new president Helena Stjernholm said to be very critical of how the Board of Ericsson done its job.
And Leif Johansson hindsight during his tenure as president is gloomy. Since he took office in spring 2011, Ericsson has lost about 25 percent of its market capitalization. During the same period, the Stockholm Stock Exchange index climbed by almost 45 percent.
Ericsson has lost ground against competitors as Chinese Huawei, sales have stagnated and costs have risen. At the same time, the Board of Leif Johansson approved big raises and bonuses to CEO Hans Vestberg and other management.
Self Leif Johansson signed for almost 20 million in compensation during his presidency, but chosen to take out everything in cash instead of shares in Ericsson, which meant that he fared much better than the shareholders.
As SvD Business written in the past, the Board has also failed in its most important task: to ensure that the company has the right president. He supported the criticized Vestberg so long should not have strengthened Leif Johansson card.
In addition, Leif Johansson reputation greatly soiled by the development of the Volvo and the truck cartel cost the automotive giant over 6 billion in fines to the EU Commission. This is something that, according to several sources should have concerned mainly foreign investors. Leif Johansson ended up as CEO of the Volvo 2011.
The new corruption allegations against Ericsson and the suspected accounting trickery Ericsson indulged and SvD Business could reveal also weakened Leif Johansson’s position.
it is clear that there is Industrivärden and Investor rather than Leif Johansson who intend to control the process to find a new CEO.
clearly that patience from Ericsson’s major shareholders is over.
– Helena Stjernholm have no confidence Leif Johansson has been with Industrivärden’s Fredrik Lundberg, Chairman of a substitution must, says a source familiar with in the game for the telecom giant.
among the institutional owners are great discontent.
– the Leif Johansson has to be removed is obvious. The only thing that saved him so far is that they had to also kick the president says a great owner.
The confidence Leif Johansson is low also makes the recruitment of a new President for Ericsson complicated. To a chairman owners lack confidence will manage the hiring of the new CEO is an untenable situation. There will also be one of the reasons that Ericsson indicated that the recruitment of a new President will take a long time, according to SvD Näringsliv sources.
– It is clear that there is Industrivärden and Investor rather than Leif Johansson who think control the process of finding a new CEO, a source said.
According to SvD Enterprise sources is both Investor and Industrivärden very deeply involved in Ericsson. Investor’s CEO Johan Forssell should have gone a step further. He reported regularly to have had secret meetings with high-Ericsson executives but also with managers further down in the organization. During the meetings the issues of strategy, profitability and prospects for Ericsson’s various activities have been discussed. Johan Forssell frequent visits out at the headquarters in Kista will reportedly told SvD Business unknown to the other major shareholder. Internally, it has started speculation that Investor has its own agenda for Ericsson.
A large part of the responsibility for Ericsson’s performance falls too heavily on the Investor and the Wallenberg family’s front figures. Investor former CEO Borje Ekholm has served on the board since 2006 and chairman of Investor, Jacob Wallenberg since 2011.
about Investor conflict with Leif Johansson on Ericsson loses the same time practically everything its influence in the Astra Zeneca.
For Investor’s more question that makes a change of Leif Johansson delicate. Leif Johansson is also Chairman of Astra Zeneca in which Investor owns 4 percent stake worth nearly 30 billion. But the investor is only the fourth largest shareholder in the company.
– If the Investor conflict with Leif Johansson on Ericsson loses the same time practically all their influence in AstraZeneca. That they would be able to choose the next president of Astra Zeneca is unlikely. Same time it is of course absurd for this to control who keeps the club at Ericsson, says a major shareholder.
On the issue of the trust Leif Johansson, Ericsson says Investor Communications Stefan Stern: “we obviously have full confidence in who is the chairman of the holding where we are majority shareholders.”
Industrivärden says the company out of principle not pronounce itself on issues of trust for individual executives or board members.
Leif Johansson miserable hindsight
• Ericsson’s share price has plummeted
• the company does not grow
• Huge bonuses to management, despite weak results
• Failure in the CEO’s position
• Have taken the chairman’s fee in cash instead of shares
• Corruption Allegations surrounding the company
• Volvo truck cartel solkar Johansson’s reputation
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