On Friday, Joe Hogan, chief executive officer (CEO) of ABB, the world's largest manufacturer of power substations and transformers, announced he would resign for "private reasons."
Hogan had been CEO of ABB for five years, leading the company through a transition by cutting costs, successfully expanding the company's North American presence, increasing R&D funding and spending $20 billion on acquisitions. ABB recently made news in the energy space when Hogan spent $1 billion to purchase solar inverter-maker Power-One.
In the wake of Hogan's resignation, Prith Banerjee, chief technology officer (CTO) at ABB, has announced his resignation. Banerjee and Hogan's resignations are unrelated, according to ABB.
Insiders' and analysts' reactions to the news:
ABB Chairman Hubertus von Gruenberg praised Hogan's time as CEO: "ABB today is in a much better position than it was when he joined. The board sincerely regrets that Joe will be leaving the company."
Panagiotis Spiliopoulos, an analyst at Bank Vontobel, said: “Hogan’s track record of cutting costs and protecting margins is exemplary in the industry. Several larger acquisitions to fill technology white spots and expand the company’s presence in North America were highly successful. We regret the departure.”
Morgan Stanley analyst Ben Uglow: "One natural assumption could be that, like [Hogan's] predecessor Fred Kindle, this is in reality a disagreement with powerful board factions over strategy."
Canaccord Genuity analyst James Stettler: "We have been concerned about their power business. The market in Asia is particularly competitive, the pricing is tough and it's a highly politicised environment in China. The new CEO should have more of a view to expand outside of power. I'd like to see the new CEO try to shrink the high-voltage power business."
Kepler Cheuvreux analyst Christoph Ladner noted the company would have to put its acquisitions strategy on hold: "The company's divisions can function in the short term without the CEO. But for strategic direction you need a CEO."