Following the departure of CEO Hans Vestberg, Ericsson’s two largest, and highly influential, shareholders turned their sights on chairman Leif Johansson, reported Svenska Dagbladet.
Industrivarden and Investor want to see Johansson gone, as they look to reverse the poor recent performance of the infrastructure vendor.
The chairman, who has been in place since Spring 2011, seemed unable to reverse a decline in Ericsson’s share price, which has fallen about 25 per cent in the past five years. Meanwhile, the Stockholm stock market index climbed by about 45 per cent.
Sales are flat and costs have risen, while Johansson approved pay rises and bonuses to Vestberg and other senior management, say critics.
Corruption allegations and recent allegations about the company’s accounting practices have not helped his case.
Vestberg stepped down barely a month ago, with Jan Frykhammar, CFO, taking the hot seat on an interim basis.
Having a chairman who lacks support of the company’s most important shareholders leading the search for a new CEO is problematic. Industrivarden and Investor intend to spearhead the search themselves, a source said.
However, some of Ericsson’s woes at least are sectorial and not just company specific, as can be seen from Cisco’s restructuring announced yesterday and cost cutting at Nokia.