• by Thom Forbes  @tforbes, May 19, 2011

Why would Hershey CEO David J. West, 48, leave his high-profile, high-perk -- all the Reese's Minis you can eat! -- position to head up a smaller company, Del Monte Foods, that produces things like Contadina tomato paste and Milk Bone dog biscuits? Well, he tells the Wall Street Journal's Joann S. Lublin and Julie Jargon, he's looking for the rush of "learning and being challenged by a new food category.'' Plus, his daughter's going to college In California, and Del Monte is based in San Francisco.

The reporters throw a couple of other possible reasons out there for us to chew on. First, the potential payout for West is greater at Del Monte, which was taken private by a group led by private equity firm Kohlberg Kravis Roberts & Co earlier this year. Second, his relationship with the Hershey board has reportedly been tense since it decided to enter its losing bidding war for Cadbury with Kraft Foods.

Hershey, which controls more than 40% of the U.S. chocolate market, is owned by a charity established in 1909 by Milton and Catherine Hershey to finance and operate the renowned 1,800-student Hershey School for disadvantaged children. Hershey had $5.83 billion in revenue in its last fiscal year; Del Monte about $3.74 billion.

West could have wanted to get away from the control that the trust has over Hershey, Morningstar analyst Erin Lash tells Reuters' Brad Dorfman. He was elevated to the CEO position in 2007 when his predecessor, Richard Lenny, resigned after clashing with the board.

"He could be motivated by the fact that there will be more freedom to steer the ship in terms of strategic direction at Del Monte," says Lash.

"This is a significant negative development for Hershey given high loyalty to former CEO West throughout the organization," Deutsche Bank analyst Eric Katzman writes in a note to clients cited by Cotten Timberlake in Bloomberg BusinessWeek. "It will be difficult for Hershey to recruit as capable a CEO near to intermediate term."

John Bilbrey, Hershey's current COO, has been named interim president and CEO. Bilbrey became operations chief last year, and helped establish Hershey brand products around the world, according to a statement from the company.

Bloomberg BusinessWeek's Cotten Timberlake and Jeff Green detail some of the other problems that West and other Hershey CEOs have encountered and say that the trust could scare off strong outsiders, leaving Bilbrey as the best choice for the permanent job.

Says Joel Koblentz, senior partner at recruiting firm Koblentz Group: "If they cross the line between governance and infringe on leadership, they can't attract the best candidates. The best-qualified CEOs want to run the show."

The Philadelphia Inquirer's Bob Fernandez reports that Hershey shares lost almost 3% of their value, or $1.65, and closed at $55.43 yesterday. Board chairman James E. Nevels says, however, that the company will maintain its long-term financial targets and will "work quickly to name a permanent chief executive officer to ensure the continuation of this orderly transition."

"We are surprised and unsettled to see Mr. West leave, given his enormous success in transforming a shrinking company into one of the best growth stories in food," Janney Capital Markets' Jonathan Feeney writes. But he retains his buy rating on Hershey stock, the Inquirer's Fernandez reports, saying, "We are confident that Hershey's current virtual cycle of investment and superior returns can be sustained for shareholders."

Everyone seems to be wondering what new product innovations West will bring to Del Monte. A person close to Del Monte's board tells the Journal's Lublin and Jargon that the company's directors admired "Hershey's success launching new products, like Reese's Minis, and hope Mr. West will duplicate that by finding fresh uses and marketing approaches for Del Monte's fruit and vegetable brands."

Writes one commenter:

"Will we soon see little cherry tomatoes, stuffed with peanut butter, wrapped in tinfoil, and packed in a can"?

Well, let's just say that we see why West is getting the big bucks.