BATTLE CREEK, MI: Kellogg's will delay the launch of a full-fledged IR effort to showcase its incoming CEO, despite a drop in its stock price last week following President Bush's nomination of its current CEO, Carlos Gutierrez, for secretary of commerce.
"We were talking to the investment community already; we had a lot of incoming calls," said Simon Burton, director of IR with Kellogg's. But a major IR road show will wait until after confirmation hearings, he said.
Following the November 29 announcement, Kellogg's board quickly named James Jenness, a member, as its new CEO and chairman, effective upon Gutierrez's confirmation.
Investors reacted negatively, with Kellogg's shares dropping $1.54, its largest one-day decline since February 2003.
Analysts expressed concern about executive defections and surprise that the COO was not named to succeed Gutierrez.
IR expert Mike Rosenbaum, of Rosenbaum Advisors in Arlington Heights, IL, said delaying more aggressive IR efforts with Kellogg's new CEO could backfire. "They should do something now so people get confidence the board made the right decision," he said.
The company needs to discuss how the new chairman and the passed-over COO will work together, he said.
Howard Zar, a Porter Novelli partner and head of IR, said that it's best for companies to move quickly to talk with analysts and investors during a CEO transition. Not doing so "allows the marketplace to dictate what it thinks the problems are rather than have the company tell what it's strengths are," he said.
Kellogg's is handling IR on the transition internally.