Thomson Reuters Corp Chief Executive Tom Glocer is stepping down at the end of the year following a slump in the share price in recent months. He will be replaced by Chief Operating Officer James Smith, a veteran Thomson executive who has run the company's most successful operations.
The news and information company has undergone a series of structural changes and management shake-ups over the past six months to address the lacklustre performance of its Markets business, which mainly serves financial institutions.
With Glocer's departure, Canada's Thomson family, which acquired control of Reuters Group Plc in 2008 to create Thomson Reuters, is removing the last senior Reuters executive from the company's top echelon. The family's holding company Woodbridge owns about 55 percent of Thomson Reuters.
By the end of the year, the organizational strategy and budget work I have been leading will be complete, and the transition plan I launched last summer will have achieved its objectives, Glocer said in a statement on Thursday.
Thomson Reuters also reaffirmed its 2011 outlook but said that excluded any one-time charges related to what it termed a restructuring. The company declined to give more details.
Smith, a former journalist who joined the Thomson newspaper group in 1987, previously was head of the Professional unit, which sells legal, tax and accounting products. Since the merger, the Professional business, which was a Thomson Corp unit, has steadily outperformed the Markets operation, which was largely the legacy Reuters business.
Smith, 52, is the former head of Thomson U.S. newspaper operations. During his tenure, the company became one of the first media companies to shift away from the declining newspaper business to focus on electronic publishing.
Glocer is credited with rescuing Reuters a decade ago through a sweeping cost-cutting program, when the company's performance and stock price swooned following the dotcom bust. He later engineered the acquisition by Thomson Corp for about $17.2 billion, a 40 percent premium to Reuters share price at the time.
Glocer, 52, broke with Reuters tradition when he took over in 2001 as the then British company's first American and first nonjournalist chief executive.
Tom will be remembered as the individual who turned around Reuters ten years ago, led the company to growth and guided its sale to form Thomson Reuters, said David Thomson, chairman of Thomson Reuters.
He added that Smith has already had a remarkable career in the company and will provide strong leadership for Thomson Reuters at this juncture.
NEW PRODUCT DISAPPOINTS
The company's stock has dropped 36 percent to $26.88 from a high of $42 in February this year, as its banking and financial customers laid off tens of thousands of employees and slashed costs. Sales of the new flagship desktop product for financial clients, Eikon, have also disappointed, putting pressure on the stock.
The weak performance led to the departure in July of a group of senior executives including Markets chief Devin Wenig, a protege of Glocer who had been seen as a potential CEO successor.
It was reasonably clear that the company was under pressure to find a way to respond to what was a very slow recovery from the market turmoil, said Claudio Aspesi, analyst at Sanford Bernstein.
The company faces fierce competition in financial markets from Bloomberg LP, which is also trying to make inroads into the legal business.
For the third quarter, revenue from the Professional business, which accounts for 42 percent of overall revenue, rose 10 percent. That was much stronger than the 1 percent revenue growth in Markets.
Thomson Reuters also announced a new organizational structure with five divisions.
Among them, Reuters' legacy Markets business will be part of a new division called financial and risk operations headed by David Craig. He previously worked for Smith as head of the corporate governance business, one of the top performing sectors of the company.
The other four division are: Legal under Mike Suchsland; Intellectual Property & Science under Chris Kibarian; Tax & Accounting under Brian Peccarelli; and Global Growth Organization under Shanker Ramamurthy.
All five division heads will report to Smith, as will Thomson Reuters Editor-in-Chief Stephen Adler, President of Media Susan Taylor-Martin, and Jon Robson, who will head a new business development office.
The announcement came after the market closed and the company's shares were unchanged in extended trading.
(Reporting by Jennifer Saba and Robert MacMillan, editing by Ted Kerr and Tiffany Wu)