October 16, 2010 - Susan Ivey announced that she would retire from Reynolds American Inc. after nearly 30 years in the tobacco industry. Ivey, 51, said she would retire as chairwoman on October 31, then as chief executive, president and member of the board of directors on February 28. The Reynolds board named Daniel “Daan” Delen, 44, to succeed her as president, chief executive and board member, effective January 1, 2011. The board elected Thomas Wajnert, 67, as a non-executive chairman, effective November 1, 2010 . He has been the board’s lead director since 2008. The company said that Ivey plans to move to Florida to be near family and to spend more time traveling with her husband, Russell Cameron, who is already retired. From a business perspective, the news was surprising since Ivey appeared to be in the prime of her career.
Ivey, has been chairman, president and CEO of Reynolds American since 2006. She served as RAI’s president and CEO and a member of the board of directors between 2004 and 2006. From 2001 to 2004, Ivey was president and CEO of Brown & Williamson Tobacco Corp. Brown & Williamson and R.J. Reynolds Tobacco Co. combined their U.S. businesses
Susan Ivey a short biography..
Ivey will enter retirement as one of the nation’s mostly highly paid female executives. For example, her total compensation for 2009 was $16.2 million. Locally, even though Reynolds had an 18 percent loss of jobs, or about 600, during her years as chief executive, she slowed the pace of cuts, compared with the loss of 12,100 jobs from 1983 to 2004.
Analysts said they were somewhat surprised by Ms. Ivey's decision because she is a young CEO. But they said she was leaving Reynolds—the second-largest U.S. tobacco maker by sales after Altria Group Inc.'s Philip Morris USA—in good financial shape in an industry that faces declining cigarette sales and continuing scrutiny from regulators and anti-smoking groups.
Graphic by Nicolas Weir, of
the Winston-Salem Journal..
"Susan has turned Reynolds into a very good No. 2," said UBS analyst Nik Modi. "She's young, but she's had a heck of a career." Ms. Ivey, who was the first woman to run a major tobacco company, has transformed the maker of Camel and Pall Mall cigarettes by slashing its portfolio of cigarette products and reducing production costs. In 2006, she spearheaded the acquisition of Conwood Co., the maker of Grizzly moist snuff, a successful entry in the growing smokeless-tobacco category. (Reynolds American Inc. acquires Conwood..)
(British American Tobacco (BAT) owns about 42 percent of Reynolds American Inc. stock.)
Ms. Ivey has also pushed Reynolds into other product areas, such as snus, a type of spitless tobacco, to help prepare for a future that is likely to include fewer smokers. (How's SNUS doing in the U.S. - will Susan Ivey tell us the truth??) Nearly a year ago, Reynolds became the first major tobacco company to buy a maker of quit-smoking aids when it bought Sweden's Niconovum AB, a nicotine-gum maker. (Reynolds American Inc. completes acquisition of Niconovum AB..) Also, under Ms. Ivey's watch Reynolds entered the dissolvable tobacco products market.
After ongoing evaluation, the board also decided to split the roles of chairman of the board and chief executive officer, in line with best-practice trends in corporate governance. Thomas C. Wajnert was elected non-executive chairman of RAI’s board, effective Nov. 1, 2010. Wajnert has served as the board’s lead director since 2008, serves as the chair of the board’s compensation and leadership development committee, and is a member of the corporate governance and nominating committee. He chaired the board’s audit and finance committee from 2004 to 2009.
Reynolds-American is headquartered in Winston-Salem, North Carolina less than 30 miles away in Greensboro, North Carolina is Lorillard, Inc., the maker of Newport menthol cigarettes with its new CEO Murray Kessler..
References: Reynolds American announces dividend increase, two-for-one stock split and 2011 retirement of CEO Ivey, Reynolds American Inc., 10/15/2010; Ivey to leave Reynolds She plans to retire as chairwoman at end of month by Richard Craver (email@example.com), Winston-Salem Journal, 10/16/2010; Reynolds CEO Ivey Plans to Step Down by David Kesmodel, The Wall Street Journal, 10/16/2010.