In a sign of growing disenchantment between the Hershey Trust and the candy companys management, all but two members of Hershey Co. board of directors resigned Nov. 11 and were immediately replaced.
The only two to retain seats are David West, who will become CEO on Dec. 1, and Robert Cavanaugh, a member of the Hershey Trust Board. Kenneth Wolfe, a former Hershey CEO, was named a director and he will replace Richard Lenny as chairman on Dec. 1.
The company publicly said six independent directors resigned at the request of the Hershey Trust, and two more directors, elected separately by the company's common stock shareholders, also resigned, although the trust did not request their resignations.
The nearly new slate continues the clean sweep begun in October when Chairman/CEO Lenny, 55, announced his retirement. A few weeks later, Gregg Tanner, senior vice president of global operations, quit, less than 18 months after joining the company. And a few weeks before Lennys announcement, Christopher Baldwin, senior vice president and president of Hersheys North American Commercial Group, departed.
On October 10, scant days after announcing Lennys retirement, the Hershey Trust, a collection of family and charitable holdings that collectively make it the companys controlling shareholder, issued a public statement criticizing the companys recent performance. The Wall Street Journal reported that even before Lennys resignation, there had been a meeting between members of the trust and Cadbury Schweppes PLC to discuss a merger, but Lenny was not invited.
In addition to Wolfe, the new board members are:
- Arnold Langbo, former chairman/CEO of Kellogg Co.
- Charles Strauss, former chairman/CEO of Unilever North America and a director of Unilever N.V.
- Leroy Zimmerman, Pennsylvania's first elected attorney general and chairman of the board of Hershey Trust Co.
- Charles A. Davis, chairman/CEO of Stone Point Capital, who earlier spent 23 years with Goldman, Sachs & Co.
- Edward Kelly, managing director of The Carlyle Group and formerly of Mercantile Bankshares Corp.
- James Nevels, chairman of The Swarthmore Group, a minority-owned investment-advisory firm, which he founded in 1991, and a member of Hershey Trust Co. Board.
- Thomas Ridge, president/CEO of consulting firm Ridge Global LLC, who was the first secretary of the U.S. Department of Homeland Security, twice elected governor of Pennsylvania and a member of the U.S. House of Representatives 1982-1994.
"The Hershey Trust, which is obligated to manage its assets solely for the benefit of Milton Hershey School, a school for children in need, has made clear it has not been satisfied with the Company's recent results," said Zimmerman.
"After careful reflection and consideration of our responsibilities to the Trust, and the best interests of all Hershey Company shareholders -- and after a due-diligence period in which we investigated and ascertained the considerable interest of best-in-class directors who were eager to work with the Trust to benefit all shareholders -- we determined to elect new Directors to aggressively pursue addressing the Company's business challenges," he continued. "Together and individually, these new directors are independent-minded leaders with world-class capabilities and highly relevant expertise. Having implemented these changes, the Trust Board will return to allowing this Company Board and Management team to do their jobs and lead the Company to new successes."
