Paul Walsh

Diageo boss Paul Walsh calls time

The CEO of Diageo, Paul Walsh, the FTSE 100’s third longest-serving boss and a man who has a strong affinity for South Africa, is stepping down after 13 years at the helm of the company behind Smirnoff and Guinness, and the world’s largest producer of spirits.

He will make way for company veteran Ivan Menezes, who has been chief operating officer of the drinks group since March last year.

Walsh, who was appointed chief executive in September 2000, has presided over an impressive period of growth at Diageo. £100 invested in Diageo on his appointment would have increased to £538 today.

Soon after Walsh took charge in 2000, the company took over the Canadian distiller Seagrams in a £5.5bn joint bid with Pernod Ricard of France. Almost 10 years ago he refocused the group by selling off its food interests, including baking group Pillsbury and a holding in Burger King.

He is widely credited with having steered Diageo from reliance on slower-growing drinks such as Guinness and Smirnoff, sold in mature markets, into faster-growing, emerging markets and edgier products, spending more than £7bn on acquisitions in the process.

More recently, he has been buying up brands in emerging markets, where Diageo aims to make around half of its turnover by 2015, to counter sluggish demand in recession-hit European economies. Among others, the company has bought Turkey’s Mey Içki and India’s United Spirits.

Diageo had a market capitalisation of approximately £48.9 billion as of 7 May 2013, making it the 8th-largest company on the London Stock Exchange.

Little is known about the Lancastrian’s intentions when he steps down as chief executive at the end of next month, though given that he is only 58 a FTSE chairmanship may beckon. He will stay on as an adviser to Diageo and Menezes until June next year, picking up his £1.2m basic salary in the process. He may find time for a spot of big-game hunting on his 2,400-acre estate in South Africa and add a few more trophies to the mounted heads in his study.

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