Jan 31, 2016
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Luxottica founder takes helm as yet another CEO departs

Jan 31, 2016

Italian eyewear maker Luxottica lost its third chief executive in 17 months on Friday as key shareholder and founder Leonardo Del Vecchio tightened his grip on the maker of Ray Ban sunglasses.

Chairman Del Vecchio, 80, will take on executive powers, the company said in a statement. He will inherit the responsibility for markets from Adil Mehboob-Khan, who had arrived at the helm of Luxottica from Procter & Gamble as co-CEO only a year ago to patch up a management crisis.

Leonardo Del Vecchio

Luxottica switched to a controversial two-CEO structure at the end of 2014 following the exit of two CEOs in as many months due to rifts with Del Vecchio.

The group said on Friday that Massimo Vian, previously co-CEO in charge of products and operations, would stay on as the only CEO after Mehboob-Khan's departure. Mehboob-Khan will receive 7 million euros on top of severance benefits and outstanding bonuses.

"Two CEOs already begged the question of how you can have two chiefs. When it became clear that Del Vecchio had the desire, the energy and the vision to get more involved, we peacefully came to the conclusion that three were too many," Mehboob-Khan told Reuters in a phone interview.

"He is the founder, the top shareholder and the chairman of the board. I believe he has all the rights and, I want to stress, all the abilities to carry out his vision for the company," he said.

Del Vecchio owns 66.5 percent of Luxottica, a company he founded in 1961 and which has become the top eyewear maker in the world with revenues of 9 billion euros.

The company has been dogged by concerns over management stability over the past year and a half, even though its shares have risen 27 percent since the start of 2015 thanks to the boost from a strong dollar in its biggest North America market.


Veteran Luxottica boss Andrea Guerra left in September 2014 citing differences over strategy with Del Vecchio. His successor, Enrico Cavatorta, who had served as chief financial officer under Guerra, left after only six weeks into the job, also due to rifts with Del Vecchio.

Mehboob-Khan, the outgoing co-CEO, said Del Vecchio reasonably expected to stay at the helm for only a few years, perhaps two or three.

"He is realistic: he is not expecting to be in charge with executive powers for a decade," he said.

He added Del Vecchio thought Luxottica had not changed enough in recent years and wanted to speed up its transformation.

After taking a back seat during Guerra's successful 10-year spell at the helm of Luxottica, Del Vecchio decided in 2014 he wanted a more active role at the company.

However, as investors took fright at the governance turmoil triggered by Guerra's exit, Del Vecchio pledged to take a step back once the two-CEO structure was firmly in place.

But "the more time he spent inside the company the more he wished to have an active role," Mehboob-Khan said.

Over the past year Del Vecchio has been a near-daily presence at the company's brand-new Milanese headquarters, a company source said. The Italian billionaire is known to be especially passionate about the production side of the business.

Luxottica reported on Friday a 17 percent rise in 2015 revenues to 9 billion euros ($9.7 billion) as a strong dollar lifted the value of sales in North America, its biggest market.

$1 = 0.9236 euros


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