How will the A2 Milk (ASX: A2M) share price respond after the CEO announced she was stepping down?

A2 Milk is one of Australia and New Zealand’s largest infant formula producers and the leader in a2-only protein based dairy products. It has operations in New Zealand, Australia, USA and China thanks to key supply and distribution agreements.

A2 Milk’s CEO Departure

After only being in the role for a year and a half, the A2 Milk CEO and Managing Director Jayne Hrdlicka has agreed to step down from her role.

It turns out that the top role required more travel than she had anticipated. in a statement, Ms Hrdlicka said:

The a2 Milk Company is an extraordinary business and I joined the company excited about the opportunity to help define its full potential and deliver against it. Board and management have worked closed together to chart the future and it is no doubt bright and we are well advanced in executing it. I am delighted with how much progress has been made, the momentum underway in executing the strategy and the strength of the current leadership team. 

Commenting about her decision to step down, she said:

The reality however is that the next three to five years will continue to require the CEO being present in our core markets of China and the US and that combined with running a New Zealand company based in Australia required more travel than I had anticipated when I joined the company. The Board and I agree that this next phase is going to be too difficult to manage alongside my other commitments whilst also managing the health and wellness priorities of my family and me.”

Some investors may be fearing that A2 Milk’s Board was unhappy with the strategy that the business was taking. But that wasn’t the case.

A2 Milk said that the Board recruited Ms Hrdlicka primarily for her ability and experience in developing and implementing strategy, recognising that the company needed to develop a refined strategy for the business to meet the new challenges in the next phase of development. That’s why the Board said they fully endorse the strategy which Ms Hrdlicka and the senior leadership team have developed.

According to CommSec, about an hour before the market opens A2 Milk is priced to fall 0.4% when investors start trading.

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At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.