Negotiations to replace Novo Nordisk CEO have been ongoing for “several weeks”
Negotiations between Novo Nordisk and the Novo Nordisk Foundation for the change of CEO, which was confirmed this Friday , have been going on “for several weeks”, Novo Nordisk's chairman of the board, Helge Lund, told the Reuters news agency today.
The Novo Nordisk Foundation through Novo Holdings A/S controls the majority of votes at the annual meeting.
Novo Nordisk's current CEO, Lars Fruergaard Jørgensen, who will remain in his role to ensure a "smooth transition" to new leadership, told Danish television channel TV2 that he "did not expect" this decision to change the company's leadership.
Lars Fruergaard Jørgensen had been with the company since 1991 and became CEO in January 2017.
“The search for Lars Fruergaard Jørgensen’s successor is ongoing and an announcement will be made in due course. In connection with this change in the CEO role, Novo Nordisk Foundation Chairman Lars Rebien Sørensen will join the company’s board, initially as an observer,” the pharmaceutical company explained on Friday.
Lars Rebien Sørensen was CEO of Novo Nordisk between 2000 and 2016 and since 2018 has been chairman of the Novo Nordisk Foundation and Novo Holdings A/S.
The company highlights the growth that has occurred in the organization under the leadership of Lars Fruergaard Jørgensen. “During his eight years as CEO, sales, profits, and share price have almost tripled. […] The changes we are announcing now are made in light of the recent challenges Novo Nordisk has faced in the market, and the development of the share price since mid-2024.”
In light of this, the company explains, the board of the Novo Nordisk Foundation “initiated a dialogue with the board of Novo Nordisk” on the merits of a more accelerated CEO succession and expressed its desire to increase its representation on the board of Novo Nordisk”, highlights the pharmaceutical company.
“Considering the recent challenges in the market, the declining share price, and the wishes of the Novo Nordisk Foundation, the board of the company and Lars Fruergaard Jørgensen have jointly concluded that initiating the succession process for a new CEO is in the best interest of the company and its shareholders. Lars Fruergaard Jørgensen has agreed to continue as CEO in order to provide a smooth transition to new leadership,” the company said.
In one year, Novo Nordisk has lost more than half of its value on the financial markets. The company's market value currently stands at $279.7 billion (€249.8 billion). And today, with the announcement that current CEO Lars Fruergaard Jørgensen is leaving due to "market challenges and falling share prices," the losses have increased by a further 2%.
And things don't improve that much if we take into account the pharmaceutical company's share price since the beginning of the year. The decline is milder compared to the same period last year, but the drop is still steep, amounting to 33.2%.
This Friday, Novo Nordisk shares are trading at 57.68 euros.
“Serving as CEO of the company for the past eight years has been a privilege and an experience I will always cherish. I am proud of the results I have helped create together with my team, the board, and the thousands of employees I work with every day in the fight against chronic diseases,” said Lars Fruergaard Jørgensen.
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