* ABB says successor to be chosen in due course
* Hogan joined company as CEO in Sept 2008
* Has focused growth on power, automation
* ABB Q1 profits missed estimates
* Shares down 1 pct
(Recasts with background, shares, analyst comments, writes
By Martin de Sa'Pinto
ZURICH, May 10 ABB has announced the
surprise departure of its chief executive just three weeks after
the engineering group reported earnings that fell short of
expectations, saying the move was for private reasons but giving
The Swiss company, the world's biggest supplier of
industrial motors and power grids, said Joe Hogan, 56, would be
leaving after nearly five years in the post. It said no date had
been set for his exit and a successor would be named in due
His departure comes after ABB in April warned it faced a
tough second half of the year and said it was stepping up
ABB also changed its chief financial officer just three
months ago and analysts said the all-change at the top could
herald a refocusing of the business.
"One natural assumption could be that, like (Hogan's)
predecessor Fred Kindle, this is in reality a disagreement with
powerful board factions over strategy," said Morgan Stanley
analyst Ben Uglow in a note.
Hogan, who was paid a total of 10.2 million Swiss francs
($10.8 million) for 2012, said it had been a hard choice to
"This has been a difficult decision as I leave behind a
strong and talented executive committee and a cohesive board
whose support I could always count on," he said in a statement.
Yet it also comes as ABB faces difficult market conditions.
"We have been concerned about their power business. The
market in Asia is particularly competitive, the pricing is tough
and it's a highly politicised environment in China," said
Canaccord Genuity analyst James Stettler.
"The new CEO should have more of a view to expand outside of
power. I'd like to see the new CEO try to shrink the
high-voltage power business," Stettler said.
Shares in ABB fell 1.0 percent to 21.33 Swiss francs by 0848
GMT, underperforming a 0.3 percent rise in the European
Industrial Goods sector and peers Schneider
and Siemens, both trading higher.
Hogan took the helm at ABB in September 2008, since when the
group has invested some $20 billion to strengthen its
operations, including making the major acquisitions of U.S.
groups Baldor and Thomas & Betts and, in April this year, solar
energy company Power One.
Credited with bringing costs under control, Hogan invested
heavily in research and development to strengthen ABB's power
and automation businesses, raising R&D spending to almost 3.7
percent of revenue from 3 percent when he joined.
In Hogan's time at the helm, ABB's revenues grew to 13
percent to $39.3 billion, while the number of employees climbed
more than 20 percent to 146,100.
But his drive to rebuild the company - which clawed its way
back from near bankruptcy at the beginning of the millennium by
slashing costs and closing businesses - has not been plain
Operating profit fell to 10.3 percent of revenue in 2012
from 13 percent when he took over. ABB shares are trading at the
same level as then, against a more than 60 percent rise for
French rival Schneider and an 8 percent increase for Siemens.
Nonetheless, competitive pressures from emerging Asian
rivals may be easing, as regional wages rise, said Stefan
Gaechter at Swiss brokerage Helvea, adding that the company is
outperforming its peers on the operational side.
Hogan's departure is the latest in a string of unexpected
CEO changes at top European companies, coming after Paul Walsh
said he would stand down from the top job at spirits company
Diageo while Pierre-Olivier Beckers said he would leave
supermarket group Delhaize by year end.
Hogan, an avid sportsman who scaled Mount Kilimanjaro in
Africa with his son, will lead the company until a successor is
named to ensure a smooth transition, ABB said, adding it would
look both within the company and externally for a replacement.
ABB Chairman Hubertus von Gruenberg said Hogan had done a
remarkable job in leading the company through the economic
crisis. "ABB today is in a much better position than it was when
he joined ... the board sincerely regrets that Joe will be
leaving the company."
($1 = 0.9408 Swiss francs)
(Editing by David Cowell and David Holmes)