Newell Brands Parting Ways With CEO Polk, Searching For Successor

Newell Brands -- the marketer of a motley conglomeration of familiar products ranging from Mr. Coffee to Rubbermaid containers to Parker pens to Coleman camping lanterns to, fittingly, Elmer’s Glue -- is looking for a new chief executive.

Michael Polk, 58, who has led the company as president and CEO since 2011, announced Thursday that he’d be retiring at the end of the second quarter in June. Newell says its board of directors agrees with Polk that “now is the right time for a management transition.” It has hired executive search firm Heidrick & Struggles to assist it in finding a successor. 



Polk “engineered Newell’s [NWL] $15 billion acquisition of Coleman products maker Jarden Corp in 2016, adding about 120 brands and more than doubling the company’s size. However, Newell … came under pressure from activist investor Starboard Value LP over the purchase,” Reuter’s Soundarya J writes.

“Starboard said the company’s management had made missteps in integrating and operating Jarden, and along with former Jarden executives made a bid to replace Newell’s board and oust Polk. Fellow activist investor Carl Icahn also picked up a stake in the company and sought board representation,” J continues. “Newell last year settled with Starboard and Icahn, agreeing to give them board seats and to accelerate its turnaround program by raising its asset sales target to about $10 billion from $6 billion.’”

But a lot of damage had already been done before its Accelerated Transformation Plan was expanded last May. 

“When NWL acquired Jarden Corporation for $15 billion in 2016, we warned investors that the deal would destroy value. It only took two years for our prediction to come true. In 2018, NWL admitted that the acquisition was failing and sold off several of its brands. The company also recorded an $8.3 billion write-down (28% of invested capital),” research analyst David Trainer writes on Seeking Alpha.

“Now that NWL has filed its 10-K (4 days after it was due), our analysis shows that 2018 was NWL's worst year in regards to return on invested capital (ROIC) in at least 20 years.”

Not that Polk’s reign didn’t have its successes.

“Polk oversaw several years of growth in Newell’s sales and stock price before the Jarden merger. Since that deal, however, Polk encountered ‘a laundry list of issues’ both internally and externally, according to Jefferies analyst Kevin Grundy,” Nicholas Jasinski writes for Barron's.

“‘Communication with the Street was unreliable, portfolio decisions indecisive, financial reporting at times opaque, commitment to FCF/EPS quality lacking, incentives/structure post-deal poorly aligned, and delivery on cost synergies non-existent,’ Grundy wrote in a report on Thursday night,” Jasinski adds.

Polk “came to Newell from Unilever PLC, where he was a top executive and seen as a rising star. A Harvard M.B.A. described by colleagues as intense and sometimes hot-tempered, Mr. Polk won respect on Wall Street,” Sharon Terlep reports for the Wall Street Journal.

“Wells Fargo analyst Bonnie Herzog said his departure appeared unplanned given that Newell had no successor in place. ‘While optically this may not seem good, it’s hard to believe things can get much worse from here,’ she said.”

“Last month, Newell shares plummeted after the company issued full-year sales and profit forecast below expectations. The company said it was hit by inflationary pressures, including tariffs and a strong dollar. Newell said it expected those environmental factors to take a $200 million bite out of profits in 2019. Newell projected full-year sales between $8.2 billion and $8.4 billion, below a Refinitiv consensus estimate for $8.78 billion,” reports CNBC’s Christine Wang.

Polk, who will also resign from the company’s board, said: “With the Accelerated Transformation Plan largely complete and the business beginning to turn, I believe now is the right time to transition to the next generation of leadership. I am proud of the progress we have made since 2011 transforming the portfolio and building a set of competitively advantaged capabilities in innovation, design and eCommerce.”

And with an estimated net worth of “at least $29.9 million” as of last August, he can now enjoy some free time playing Pinochle with Newell’s Bicycle brand playing cards, making pickles with Newell’s Ball branded glass jars or writing his memoir longhand with a Newell’s Waterman fountain pen. 

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