Elementis boss Paul Waterman to quit following shareholder pressure

The chief executive of FTSE 100 Elementis will stand down after nine years in charge, following criticism of his leadership by some shareholders.

Paul Waterman, 60, intends to depart the chemicals business, which produces ingredients for deodorants and skin creams, by its annual general meeting in April 2025.

His tenure at Elementis, initially founded in 1844 as a tea merchant, has seen the firm make some major acquisitions, including the antiperspirant ingredient supplier SummitReheis and industrial talc additives producer Mondo Minerals.

However, its trading was severely impacted by the Covid-19 pandemic as lower vehicle production depressed demand for talcum and restrictions on socialising weakened global cosmetics and deodorant sales.

US-based Minerals Technologies and Innospec made failed takeover bids for the FTSE 250 company in December 2020 and March 2021, respectively.

Last year, investment manager and major Elementis shareholder Franklin Mutual Advisers called for the business to be sold, saying it lacked the ‘sufficient size to accomplish its targets’.

However, Elementis turned down a 160p per share offer from New York-based private equity group KPS Capital Partners in December.

In April, another prominent investor, Gatemore Capital Management, asked Waterman to quit, accusing him of overseeing a period of ‘persistent and significant underperformance’ caused in part by ‘self-inflicted management failures’.

It criticised the Mondo acquisition, saying it had worsened debt and cash flow problems.

Gatemore also noted the firm had delivered ‘subpar’ shareholder returns since Waterman became chief executive in comparison to its peers despite receiving multiple takeover offers.

‘We believe that many of Elementis’ current problems are self-inflicted and demonstrate a continued failure of judgement of the company’s top leadership team, most notably the CEO,’ Gatemore wrote.

Born in Michigan, Waterman joined Elementis after a long stint working for BP, where he was head of its lubricants business and operations in Australia and New Zealand.

He also led the oil supermajor’s response to the Texas City refinery explosion in 2005, which killed 15 people and cost BP $3billion in damages and legal settlements.

Before BP, Waterman worked for the defunct British energy producer Burmah Castrol, as well as Dettol owner Reckitt Benckiser and Kraft Foods – now Mondelez International.

Waterman said the company is ‘now well positioned for future success as a result of our focused strategy implementation and the commitment of a very talented Elementis team’.

He added: ‘I am confident that performance will further improve through 2025 and 2026, making now an appropriate time for a leadership transition.’

Elementis shares were 1.5 per cent higher at 137p on Monday morning and have grown by around 10 per cent in the past 12 months.

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