Enrico Cavatorta has resigned as chief executive of Luxottica within six weeks of taking up the post following disagreements with founder and chairman Leonardo …
Enrico Cavatorta has resigned as chief executive of Luxottica within six weeks of taking up the post following disagreements with founder and chairman Leonardo Del Vecchio. The Italian eyewear giant said Sunday that Del Vecchio will offer Luxottica executive Massimo Vian the role of co-CEO for operations and products. If accepted, he would take Cavatorta’s role on an interim basis.
Cavatorta, who was promoted from chief financial officer on September 1, resigned Sunday over lack of clarity over the scope his powers as CEO, according to sources who also said Luxottica would call a board meeting Monday to notify its members of Cavatorta’s resignation and submit Del Vecchio’s proposal for the new appointment.
Cavatorta and Del Vecchio weren’t immediately available for comment.
Cavatorta replaced chief executive Andrea Guerra after a decade at the helm, as part of a reshuffle that saw Del Vecchio return to a more prominent role within the managerial framework.
Guerra had also quit over conflicting views with Del Vecchio about managerial choices, particularly having to work under the returning chairman.
In September, Luxottica said it wanted to be run by a co-CEO model, in which two chief executives would have distinct responsibilities and each would be in charge of a unit. The two units, markets and corporate, would be complemented by an operations role, which was given to Vian. Cavatorta was corporate chief executive, and the company said it hoped to have the second CEO in place in a few months.
The three areas fall under the supervision of Del Vecchio as chairman. Del Vecchio also heads an executive committee, which will be made up of the co-CEOs to help the executives maintain a unitary strategy.
Within the new structure, Del Vecchio will be “much more present” compared with past years, particularly in the transitional phase, Cavatorta said announcing the new structure early in September.
But he also said Del Vecchio won’t manage day-to-day operations: “He will have the role of a guide and strategic vision,” he then noted.
Cavatorta also said that the company’s strategy is unchanged, and it will continue to grow through acquisitions and by broadening its role in emerging markets. Yet the company will have a renewed focus on return on investment, he added.
“It’s not going to be a dramatic change in strategy but if in the past we have tolerated to maintain low profitability business divisions… we will now be more severe with ourselves,” he said, adding that this could refer to either licenses or proprietary brands.
Luxottica, meanwhile, has yet to appoint the second co-CEO who was supposed to flank Cavatorta.
Del Vecchio, 79, owns around 61% of Luxottica, has not yet announced the appointment of the second co-CEO who was supposed to flank Cavatorta.
Citi Group lowered its recommendation on Luxottica on Monday to ‘neutral’ from ‘buy’ following Cavatorta’s resignation. This leaves “Luxottica with the unattractive record of two highly respected managers leaving within 40 days,” Citi analysts said in a note, adding the company’s long-term strategies were likely to be affected.