HERSHEY, Pa. – Richard H. Lenny, who has struggled to preserve The Hershey Co.'s (HSY) prominence as the nation's largest candy maker, said Monday that he will retire as chairman, president and chief executive at the end of this year.
"The long-term prospects for our category and particularly for our company remain promising," Lenny said in a statement issued by the company. "I look forward to working closely with my successor so that the transition to new leadership will be effective and seamless."
Lenny, 55, has been Hershey's top executive since 2001.
The board thanked Lenny for developing a "value-enhancing strategy with the over-arching goal of building stockholder value over the long-term" and praised him for assembling an "excellent" leadership team.
"The board has begun the succession process and looks forward to making an announcement in the near future. Once announced, there will be an orderly transition from Rick to his successor," said Robert H. Campbell, chairman of the board's compensation and executive organization committee.
Almost from the start, Lenny's tenure has been bumpy.
In 2002, he weathered a strike by 2,700 union workers that largely idled two of Hershey's major plants for 42 days. That same year, he was forced to stand by helplessly as the Hershey Trust Co. — the charitable trust that is the company's controlling shareholder — put the company up for sale, only to change its mind six months later.
Lenny has pushed to catch up with Hershey's competitors in lucrative overseas candy markets such as China and India. Earlier this year, Hershey announced it will close six U.S. and Canadian plants and cut more than 3,000 workers in the two countries, including 900 total at its hometown plants, and shift more of its production to contractors and a new plant it is building in Mexico.
Hershey's second-quarter profit fell 96 percent as the company spent heavily to transform production lines and revive flat sales, and it also slashed its earning estimate for the rest of 2007 as its stock price plummeted.
At a tense shareholders meeting in April, some in the audience vented anger over job cuts that they said were contrary to the philosophy of company founder Milton S. Hershey, while others applauded when Lenny said his chief responsibility is to keep the company competitive.
"None of you knows how difficult it is," Lenny told shareholders who criticized the layoffs.
Asked why Lenny decided to retire now, Hershey spokesman Kirk D. Saville declined to elaborate beyond a one-line statement.
"After more than six years, Mr. Lenny feels that this is the right time for a new leader to take the company to the next level," he said.