Investing.com -- Shares of Schneider Electric SE (EPA:SCHN) traded lower on Monday after it announced a leadership shake-up, with Olivier Blum stepping in as the new CEO, replacing Peter Herweck effective immediately.
This change comes amidst growing concerns regarding the company's execution. “The Board of Directors decided to remove from office Peter Herweck as Chief Executive Officer due to divergences in the execution of the company roadmap at a time of significant opportunities,” Schneider Electric said in a statement,
“We have previously voiced concerns about the achievability of the 7-10% organic growth targets set out at the Capital Markets Day. While the wider CMD targets have been reaffirmed, today's announcement does not inspire much confidence,” said analysts at RBC Capital Markets in a note.
Blum, who previously served as the Head of Energy Management, will need to address the challenges that led to Herweck's departure.
“We consider Olivier Blum as a logical choice (and in fact note that there was some surprise that he was not the original replacement to Tricoire 18 months ago),” RBC said.
Due to Blum’s knowledge of the organization and its key business operations, analysts at Stifel said they expect a seamless transition.