Ocado steps up chief executive search as shareholders push to replace Tim Steiner

Traders Union
All News
Financial News
Ocado steps up CEO search

Highlights

Ocado's board intensifies CEO search, driven by shareholders frustrated with a 91 per cent share price drop since the pandemic-era peak five years ago.
Pressure on leadership shifts as Ocado faces operational strain, notably Kroger closing three U.S. facilities and the exclusivity agreement with Kroger expiring.
Steiner may transition to a different role at Ocado amid board appreciation for his technology expertise, despite unresolved disputes with Marks and Spencer.

Board succession plans gather pace

As first reported by the Financial Times, Ocado's board is intensifying its search for a new chief executive and has approached potential candidates to replace Steiner. People familiar with the matter say the talks are being driven by shareholders, who have endured a 91 per cent fall in the company's share price since its pandemic-era boom five years ago.

One person familiar with the discussions says Steiner would not choose to leave now but understands why a change may be needed. Another person with knowledge of the talks says he may remain at Ocado in a different role, with the board placing high value on his deep knowledge of the business, while adding that he still retains support from many investors.

Ocado's long-term backers include its two largest shareholders, Tetra Pak billionaire Jörn Rausing, who is also a non-executive director on the board, and hedge fund manager turned property developer Nick Roditi. Lingotto Investment Management, the Agnelli family-backed fund, is the group's third-largest shareholder with a near-10 per cent stake first disclosed in 2023.

After reports over the weekend that Ocado was looking for a successor, the company says in a statement on Monday that it continually undertakes long-term succession planning and regularly engages with potential candidates. Ocado declines to comment further.

Operational strain sharpens investor concerns

A leadership change would mark a new phase for a company that has had a turbulent path since listing in London in 2010. Ocado spent years trying to convince investors that it could generate meaningful profits from its grocery retail operations before successfully licensing its technology to retailers globally.

More recently, the group's difficulties are being driven by international customers scaling back agreements. U.S. supermarket chain Kroger, Ocado's most important client, announced last year that it was closing three underperforming facilities using Ocado technology after demand failed to meet expectations, and Ocado is now seeking a new U.S. partner after its exclusivity deal with Kroger lapses.

Under Steiner, Ocado has also clashed with Marks and Spencer, which runs Ocado's original UK grocery retail business through a joint venture, over the size of outstanding payments. That dispute remains unresolved.

Steiner oversees the development of Ocado's proprietary fulfilment technology, including conveyor systems, shuttles and newer robot-driven grid operations known as the hive. A former senior insider says the technology developed by Steiner and Ocado works and solved one of the toughest engineering challenges in online food retail, automating the process of selling groceries online.

In our earlier article on UK boards pushing back against takeover approaches, we looked at how companies such as Segro and easyJet rejected bids they argued still undervalued their assets despite offering sizeable premiums. We also noted the growing tension this creates for directors and shareholders: holding out for a better valuation can pay off as UK market sentiment improves, but it carries execution risk if the business fails to deliver comparable value after turning bidders away.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.