(Valor Econômico) Leadership changes are being driven by the pursuit of better results and debt reduction.
By Mônica Scaramuzzo and Fernanda Guimarães — From São Paulo
The year 2024 has been marked by significant CEO turnover in major companies, reflecting the restructuring processes of many firms, alongside pressure from shareholders and creditors to deliver improved results, Valor has learned from sources familiar with the matter.
On November 12, Vivara announced a new change in its top leadership—the fourth such change this year—as founder Nelson Kaufman appointed a trusted individual to the role. Similarly, in the retail sector, both Marisa and Dia Group, which are undergoing restructuring, replaced their presidents this year. At Marisa, there were even two leadership changes within a single month. In the industrial sector, high-level turnover has also been intense, driven by poor business performance, high debt levels, or both.
In October, the Cosan group announced major leadership changes within its key business holdings, including Raízen, Rumo, and Cosan Investimentos. It was the most significant management shake-up since the group’s initial public offering (IPO) in the early 2000s. The new executives’ mandate in Rubens Ometto’s conglomerate is to reduce the companies’ leverage. Cosan’s debt had risen partly due to substantial investments aimed at becoming a Vale shareholder.
“Many companies are making changes in top management amid a scenario of high debt and rising interest rates, prompting more firms to undergo restructuring,” Daniel Wainstein, partner and president of Seneca Evercore, told Valor.
“In this context, shareholders opt to replace their CEOs with leaders better suited to the company’s current circumstances,” said Wainstein.
According to him, many companies in restructuring face pressure from creditors and investors to generate liquidity and resolve debt issues. “In special situations, investors often demand management changes to accelerate restructuring.” Companies like 2W, Sequoia, and Agrogalaxy, facing financial challenges, have followed this path this year.
“Leadership turnover reflects rising interest rates and high debt levels.”
— Daniel Wainstein
At Paranapanema, which is under judicial recovery, the CEO was recently replaced to end an interim management period that had been in place for two years to stabilize the company. João Nogueira, formerly with Marisa until February, now leads the copper refining industry. At Oi, a leadership change is expected soon, as shareholders seek a CEO specialized in crisis management, as previously reported by Valor.
“CEO turnover is directly linked to economic cycles. Companies are closely tied to economic indicators, and in more challenging periods, leadership changes become more frequent,” said Joelson Sampaio, a finance professor at FGV. He noted that high interest rates, inflation, and a devalued currency increase pressures on companies, leading to investor demands for better results. “This heightened pressure often translates into CEO changes, which is precisely what we’re seeing in 2024,” he added.
Another notable leadership change this year occurred at Bradesco, following underwhelming financial results. Similarly, petrochemical company Braskem, currently experiencing a downturn in its input cycle, also announced a leadership change.
The arrival of new investors in companies not necessarily in crisis often leads to management changes. A recent example is Sabesp, which was privatized and now counts Equatorial as its main reference shareholder. Following this event, Carlos Piani was appointed to lead the sanitation company through its new phase of expansion.
Several major companies announced succession changes this year. Beto Abreu, formerly with Rumo, replaced Walter Schalka, who transitioned to the board at Suzano, and WEG named Alberto Kuba as its new president. In both cases, these changes had been planned.
“It’s important to understand that a CEO’s departure isn’t always a negative signal. In many cases, leadership changes are a necessary step to ensure the organization’s long-term success,” said corporate psychology expert Fredy Figner.
Two of Brazil’s largest companies—Petrobras and Vale—also made headlines due to government involvement in their succession processes.
At Vale, the leadership change had been planned, with the announcement initially set for January and the executive scheduled to take over in May. However, last year, President Luiz Inácio Lula da Silva sought to appoint former Finance Minister Guido Mantega, creating divisions within the board and months of turbulence before Gustavo Pimenta was selected in August to replace Eduardo Bartolomeo. Pimenta’s mission is to improve Vale’s relationship with the federal government and resume expansion projects.
At Petrobras, Jean Paul Prates was dismissed in May following internal dissent within the government coalition. He was replaced by executive Magda Chambriard.
Vale declined to comment, while Petrobras stated through its press office that it stands by its public announcements made in May when it accepted Prates’ resignation and appointed Chambriard as his successor. Cosan also reiterated its public statements about the October leadership change.
Bradesco’s board chairman, Luiz Carlos Trabuco Cappi, described the executive changes as a “necessary adjustment to market challenges.” He noted that the pandemic altered economic exchanges, business models, and global economic policies, emphasizing liquidity and low interest rates. “Marcelo Noronha has the right profile for this moment,” he said. “The board’s goal is to restore pre-pandemic profitability sustainably and structurally, consolidating a coherent and solid path.”
Paranapanema noted in a statement that its CEO change is another step in its judicial recovery process following the end of interim management. Now, with João Nogueira Batista at the helm, the focus shifts to long-term planning. Suzano reiterated its earlier announcement that Beto Abreu will advance the company’s strategic plan.
“CEO turnover is linked to economic indicators.”
— Joelson Sampaio
Dia Group stated that in May, it began “a new phase,” appointing Fabio Farina as its CEO. “The company has defined a clear strategy: ensuring operational continuity, completing its judicial recovery process, enhancing customer service, and strengthening market competitiveness in Brazil.”
Sequoia, meanwhile, said its restructuring process positions the company for a “new positive cycle” starting in 2025, with greater operational stability and profitability. Alexandre Rodrigues’ appointment as the new president marks the start of a new phase for the company, focusing on structural and operational transformation under an experienced leader in logistics, industrial operations, and services.
Vivara did not comment but reiterated its investor relations department’s previously disclosed information.
Braskem said its new CEO appointment is part of a structured succession process. “Roberto Ramos holds a mechanical engineering degree from UFRJ and has extensive experience as a counselor, entrepreneur, and executive. He led Ocyan as CEO.”
Oi, Agrogalaxy, and Sabesp declined to comment.
Women’s fashion retailer Marisa, through its press office, stated that the appointment of Edson Garcia as CEO reflects the combination of a sound strategic position with financial discipline. Following its restructuring, “Lojas Marisa has achieved impressive results and is turning the tide.” In Q3, Marisa’s revenue grew by 55% to R$350 million, while EBITDA rose R$108 million, a 163% increase. “This performance demonstrates that we’re on the right track,” the company said.
Published in Valor Econômico (print and online) on December 2, 2024. Available at https://valor.globo.com/empresas/noticia/2024/12/02/empresas-em-reestruturacao-trocam-comando-por-pressao-de-credores-e-acionistas-em-2024.ghtml
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