The new chief executive of Vodafone (VOD) has wasted no time in giving her views on the state of the FTSE 100 telecoms business and it’s not pleasant. In her opening salvo for the group’s full-year results, Margherita Della Valle said: ‘Our performance has not been good enough. To consistently deliver, Vodafone must change.’ She also announced 11,000 job cuts.

This straight-talking is often what the market wants to hear. After years of suffering, shareholders are looking for someone to revive growth at the telecoms business and they want to know if Della Valle is the person to deliver the goods.

This is classic kitchen-sinking, a term to describe a company delivering a bundle of bad news, often when a new CEO or finance director makes their first report in the job.

Some will write down the value of assets or put certain parts of a business up for review. Perhaps more powerful from a share price perspective is when a new director effectively says, ‘enough
is enough, the company cannot go on in its current state’.

That was certainly the situation with Rolls-Royce (RR.) when Tufan Erginbilgic joined as CEO at the start of 2023. He reportedly told staff in an internal briefing that the British engineer was a ‘burning platform’.

The market liked this news as it suggested he was a non-nonsense type of leader, rather than the type of boss who might sweet-talk investors with ambitious plans for growth. Shares in Rolls-Royce have risen by 51% year-to-date on hopes of a turnaround and Della Valle might secretly be hoping for the same reaction.

She might need to be more aggressive as her criticism of the business has yet to win over the market. It didn’t help that her comments accompanied a lacklustre set of results. Furthermore, Della Valle is different to Erginbilgic in that she was an internal promotion whereas the Rolls-Royce boss came from another company. That can make a big difference.

Della Valle has taken over from Nick Read who left after a troublesome four years. Investors might feel she is too ingrained in the existing culture to bring about change, whereas when Erginbilgic joined Rolls-Royce he brought completely fresh thinking.

Another new CEO to watch is Tadeu Marroco at British American Tobacco (BATS). He is also an internal promotion, moving up from finance director. His appointment on 15 May was a surprise to the market, with Jack Bowles stepping down as CEO with immediate effect.

There had been no speculation the cigarettes and vaping group was looking to change leader yet comments in the announcement implied that Bowles wasn’t the right person to take the business to the next level. 

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