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UPDATE 1-Capgemini to combine CEO, chairman roles
April 5, 2012 / 10:14 AM / 6 years ago

UPDATE 1-Capgemini to combine CEO, chairman roles

* Chairman and founder Serge Kampf to step down early

* Kampf to become vice-chairman of board of directors

* Shares in Capgemini fall 0.7 pct (Adds detail, analyst comment, share price)

PARIS, April 5 (Reuters) - Capgemini Chief Executive Paul Hermelin will also become chairman as Serge Kampf, the 77-year-old founder and current chairman of Europe’s largest computer consultancy, steps down early, the company said on Thursday.

While many governance advocates frown on such “dual roles” for chief executives, they are not uncommon in France, where companies ranging from bank Societe Generale to utility GDF Suez have CEOs who are also chairman.

The move is also a revival of past practice at Capgemini, where Kampf held both posts until 1996.

“It was predictable given the age of Kampf,” said Sebastien Thevoux-Chabuel, an Oddo analyst, adding that Hermelin had won over investors’ confidence since taking the CEO job in 2002 after a shaky start as deputy CEO in 2000.

Kampf, whose term as chairman had been extended in May 2010, will become vice-chairman, the company said.

“It is something that had been going through the minds of the management for a while,” a company spokesman said.

The company is switching back to having a top executive wearing both the CEO and chairman hats after a ten-year “trial period” during which Hermelin and Kampf worked as a duo heading the Paris-listed group.

Capgemini was run under the combined roles system by Kampf from 1967 until 1996.

Capgemini surprised analysts in February by reporting higher-than-expected 2011 revenue, due in part to growth in the non-public sector. However, the spectre of increased cost cutting among European governments could eat into 2012 growth.

Hermelin said then that the company’s sales pipeline for the first half of 2012 looked good, but that the sales force was worried some projects could be delayed.

Shares in the company were down 0.7 percent at 30.995 euros by 1008 GMT, in line with a 0.8 percent weaker French blue-chip CAC 40 index. The stock is up almost 30 percent this year. (Reporting by Nina Sovich and Alice Cannet; Editing by Christian Plumb and James Regan)

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