C.H. Robinson CEO Bob Besterfield resigned Saturday in what the company called an “involuntary termination by the company without cause” in a federal filing.
The company’s chairman, Scott Anderson, is now the interim CEO, the company said on Tuesday.
The Eden Prairie-based company provided no reason for the abrupt relocation with its public announcement Tuesday morning. The logistics and shipping giant has retained Russell Reynolds, a leading national search executive, to find a permanent replacement.
The pressure on the company’s top leader has been building for some time, said Jack Atkins, an analyst with Stevens Inc.
“Our sense is that this shift has begun to build in recent months,” Atkins wrote in a note to investors on Tuesday.
The company’s downfall was bumpy as the supply chain disruption of the pandemic settled into the new normal. C.H. Robinson announced in November that he would lay off 650 workersor 3.6% of the workforce, after declining third-quarter results.
Last July, Besterfeld said the company would see lower demand due to higher inflation and changes in consumer habits. He said slowing retail and housing markets will slow demand in the second half of the year.
“It has been an honor to lead CH Robinson and this extraordinary team,” Besterfield said in a press release. “I am proud of all that we have accomplished together and have had the pleasure of working with so many talented members across the organization during my tenure as CEO. I am confident that the leading people in CH Robinson’s industry and culture will continue to make sure the company is well positioned for the future.” .
With Anderson appointed as interim CEO, Judy Kozlak is named independent chair of the board. Anderson thanked Besterfield for his “important contributions” during his three years as CEO.
Biesterfeld, a native of Minnesota and a Winona State graduate, has been with CH Robinson since 1999 and prior to his appointment as CEO in May 2019 held leadership roles in the company’s largest companies, North American Surface Transportation and Robinson Fresh.
One of Biesterfeld’s major initiatives as CEO was to double the pace of the company’s technology investments to leverage its advantages over other logistics companies. In 2019, it was announced that CH Robinson would Investing $1 billion in technology over the next five years.
But the company has faced pressure from an activist investor recently. ancora Holdings Group has two seats on the board of directors of CH Robinson from the board members in February and subsequently signed a standstill agreement that is set to expire on January 5.
Ancora has nominated Henry Meyer, retired CEO of FedEx Ground, and Henry “Jay” Winship, founder, president and managing member of Pacific Point Capital, to these board seats.
In mid-December, also C.H. Robinson Made another change to the board: Adding Jim Barber, former Chief Operating Officer of United Parcel Service. Barber has 35 years of experience in the transportation industry.
Disappointing third-quarter results, reported in November, “and what looked to be a very difficult earnings backdrop for the company,” said Atkins, the Stevens analyst, likely contributed to the CEO’s decision.
Anderson was appointed to the Board of Directors of CH Robinson in January 2012 and has been Chairman since 2020. He was CEO of Patterson Cos from 2010 to 2017.
In the press release, Anderson said he was “committed to ensuring this is a smooth transition.”
“Now is the right time for CH Robinson to accelerate our strategic initiatives, and the Board is focused on identifying a CEO successor who can implement future opportunities for Robinson,” he said. “I look forward to working closely with our talented employees to continue improving the experience for our customers and carriers, and expanding our digital operations to drive sustainable growth.”
According to a filing with the Securities and Exchange Commission on Tuesday, Anderson will not be a candidate for the permanent CEO position. But if the search firm wants to move quickly to the next CEO, they don’t have to look far. Board members Meyer, 68, and Hallak, 62, each have 35 or more years in the transportation industry.
CH Robinson is the largest third-party logistics company, with more than $23 million in annual revenue, and the industry is fragmented. Along with many smaller competitors, there is also a growing number of tech-backed startups.
Morningstar analyst Matthew Young estimates that CH Robinson has 17% of the truck brokerage industry in the US thanks to the large network of shippers and carriers it works with but notes that competition is increasing.
“We expect competition to slowly become more orderly as the industry consolidates,” Young wrote in a research note.
Given the challenges C.H. Robinson faces, Atkins is hesitant about the company’s immediate prospects.
“We believe the problems here are bigger than one person and will take time to fix,” Atkins wrote. “In addition, the CEO transition could raise cultural issues because we believe that Mr. Besterfield was highly respected internally.”
Shares of CH Robinson closed Tuesday at $90.28, down 1.4%. Over the past 52 weeks, the stock has ranged between $86.57 and $121.23 a share.
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