Luxottica’s CEO quits; conflict with founder; $63m payout

The chief executive of Italy’s Luxottica Group, Mr Andrea Guerra, 49, has quit his position after a falling out with the company’s founder, chairman and biggest shareholder, Mr Leonardo Del Vecchio, 79.Mr Guerra’s resignation was accepted by the board of Luxottica after consideration at its monthly meeting on 1 Septber.He leaves the company with a euro 45-million ($A63 million) payout and a two-year non-compete agreent, ending 10 years as chief executive officer of the company, during which its revenue doubled to euro 7.3 billion and net profit doubled to euro 545 million, with its stock market value increasing to more than euro 19 billion ($25 billion).
The company’s share price initially fell by as much as 7 per cent following speculation that Mr Guerra might step down and over who would be his replacent, however they later recovered after it was confirmed he was leaving the company and that there would be a major change in the top echelons of the company.
There was speculation in the European business press that Mr Guerra and Mr Del Vecchio clashed over the best strategic direction for the company, particularly in regard to Google Glass pricing under Google’s arrangent with Luxottica, however that was denied by Luxottica, although it admitted the two “have been debating the best strategic direction for the group” for some time.
The company’s new co-chief executive officer corporate, Mr Enrico Cavatorta, 53, (formerly general manager and chief financial officer of the company) will join a yet-to-be appointed new co-chief executive officer, both of whom will be responsible to Mr Del Vecchio in forming a managent triumvirate at the top of the company.
“The challenges and complexities of the company and the environment are no longer suited to a single leadership role,” Mr Cavatorta said.Mr Del Vecchio, is one of Italy’s wealthiest men and has been chairman of Luxottica since he founded the company in 1961. He owns 66.5 per cent of its shares.
Having taken a back seat at the family-controlled company after hiring Mr Guerra in 2004, he will again decide over strategic matters, according to sources, indicating a decision-making structure that could reassure investors about how any differences of opinion among the three top executives would be resolved.
Luxottica Group is the biggest quality-spectacle-frame company in the world. It is the parent of Luxottica’s operation in Australia.There were conflicting media reports on the reasons for Mr Guerra’s departure from the company, including reports that mbers of the Del Vecchio family wanted to join the company, which Mr Guerra did not want; that Messrs Del Vecchio and Guerra had been debating the best strategic direction for the company for some time; that they had clashed frequently; that Mr Guerra supposedly was planning to become a minister in the government of Prime Minister Matteo Renzi; and that quarrels had led to Mr Guerra’s departure.
Some analysts said Mr Guerra’s runeration could also have become an issue.
Mr Del Vecchio said: “I thank Andrea Guerra for the contribution he has made over the years to the growth of Luxottica. At the end of this 10-year journey, the company is now ready to face up to a new chapter in its history thanks to a managent team of great strength and experience. This new phase starting today will see the Group retain its strong focus on sales and profitability, and ensure it is ready to seize opportunities and face the challenges of the market.”
Mr Cavatorta said: “Andrea has made a valuable contribution to the company. I would like to thank him personally and on behalf of the company for his contributions over 10 years. We have worked together side by side. He has done a trendous job and is leaving the company in excellent shape.”
He reiterated that any disagreents between Mr Guerra and Mr Del Vecchio and the company’s board “had more to do with differences of opinion over the approach of the shared-CEO structure and the new organisational model rather than any other issue.”
Andrea Guerra was born in Milan in 1965. He received a degree in Business Administration from the La Sapienza University of Rome in 1989.He was appointed a director and chief executive officer of Luxottica Group SpA in July 2004. Prior to joining the company, he was with Merloni Elettrodomestici since 1994, where, from 2000, he was chief executive officer.
Prior to being at Merloni, he worked for Marriott Italia where he became director of marketing.
In Luxottica Group, Mr Guerra was, among others, chairman of OPSM Group Pty Limited, a director of Luxottica Srl, Luxottica US Holdings Corp, Luxottica Retail North America Inc and Oakley Inc.
He is also a mber of the strategic committee of Fondo Strategico Italiano SpA and a director of Amplifon SpA and Ariston Thermo SpA.