Ellen Kullman, chairwoman and chief executive officer of DuPont, will retire in less than two weeks on Oct. 16. As the company announced her retirement after nearly six years as CEO, it also reported that its earnings this year will come in below its previous predictions.
Succeeding Kullman, 59, as interim CEO will be board member Edward Breen, who will continue to serve as chairman of security products firm Tyco International. DuPont’s board has hired an executive recruitment firm to search for Kullman’s permanent replacement. Breen was Tyco’s CEO from 2002 to 2012 and previously served as CEO of Motorola.
Kullman provided no reason for her departure after 27 years with DuPont except to say “now is the right time for a new leader to continue to drive the pace of change to capitalize fully on the opportunity ahead.”
She recently came through a bruising battle with activist investor Nelson Peltz and his Trian Fund, which failed in a bid to gain seats on DuPont’s board. DuPont’s share price has fallen more than 25% since May 12, the day before Peltz lost a shareholder vote.
Kullman also orchestrated the spin-off of DuPont’s performance chemicals operations, now known as Chemours, to shareholders on July 1. That action came partly in response to pressure from Peltz to make DuPont a simpler and more consistently profitable firm. In 2011, she championed the purchase of Danisco, making DuPont a force in food ingredients and industrial enzymes.
In a conference call with investors that followed the retirement announcement, Breen commended Kullman for her leadership through the 2008 financial slowdown and her actions to cut costs at the firm. But Breen and DuPont’s chief financial officer, Nick Fanandakis, also acknowledged that DuPont expects its operating earnings to come in at $2.75 a share this year, down from previous guidance of $3.10 a share.
DuPont attributed the decline to the strong U.S. dollar versus currencies in emerging markets, particularly Brazil, where demand for crop protection and seed products is also weaker than expected. To counter the weaker profit outlook, DuPont said it would accelerate by one year an ongoing cost-cutting action. The firm now expects to achieve $1.3 billion in savings by the end of 2016.
Given the current “challenging environment,” Breen added, he and DuPont’s leadership team would take a “deep dive into our cost structure” in an effort to deliver “appropriate” returns to shareholders.