Chiquita To Replace Fernando Aguirre As CEO
Chiquita Brands International Inc. will replace Fernando Aguirre as the company’s chief executive and cut 310 jobs as the company struggles to improve its profitability, the Charlotte Business Journal reports.
The news came Tuesday afternoon as the banana and salad company missed analysts’ earnings expectations and reported second quarter net income of $12 million, or 27 cents per share, down from $34 million, or 73 cents per share, for the same quarter in 2011.
Analysts had estimated that the company would report a profit of 36 cents per share.
Quarterly revenue also dropped to $833 million from $870 million a year earlier.
Aguirre has led the company for nine years. Chiquita says he will remain chairman through completion of the company’s headquarters move to Charlotte from Cincinnati this month. In a company filing Tuesday with the Securities and Exchange Commission, Aguirre will receive $40,000 per month as a consultant during the transition.
The Chiquita board is forming a committee to find a new CEO.
Aguirre is the second high-ranking executive to leave the company in the past six months. In February, Michael Sims was replaced as CFO by Brian Kocher.
The news of the job cuts prompted concerns that the company would not meet its goal to increase its employment in Charlotte to more than 400 jobs as part of its headquarters relocation.
The Journal reports that Bob Morgan, Charlotte Chamber president, says the incentives offered to Chiquita are performance-based.
“If the jobs promised do not come to Charlotte, the incentives do not get paid,” Morgan said in a statement.
The company didn’t immediately comment on whether it would be able to meet incentives goals.
The recruitment of Chiquita marked the first time that Charlotte and Mecklenburg County had granted upfront money to a relocating company. Of the $22.7 million in incentives, the local governments agreed to pay Chiquita $1.75 million upfront.
As a part of the Charlotte move, Chiquita promised to stay in town for at least 10 years and spend at least $14 million for local operations. Other requirements included an average annual salary of $106,000 for local workers.
If the company doesn’t meet the requirement, it would have to return some or all of the incentives, Charlotte officials said.
In June, Chiquita unveiled a sign atop the NASCAR Plaza tower, where it occupies 138,000 s.f.
Morgan says Aguirre did a service for Charlotte in moving the company to the Queen City.
“He added Chiquita to our skyline, and he has made many other positive civic contributions in a short period of time.”
As Chiquita was making the move to Charlotte, it appeared Aguirre was planning to make the Queen City his home as well. In April, he and his wife paid $1.3 million for a one-acre lot in Seven Eagle subdivision. The homesite backs up to Quail Hollow Club golf course.
It’s not the first time that Aguirre has had troubles with his board. In June, the directors voted down a $5.8 million raise that the company planned to give Aguirre.
That move followed a 41 percent drop in the company’s stock value during 2011.
Chiquita says it expects its cost-savings efforts to save the company $8 million during the fourth quarter. The savings are expected to grow to $60 million during the following 12 months.
The cost-saving plan is expected to result in a $15 million charge during the second half of the year, the company says.