Dive Brief:
- Electronics contract manufacturer Jabil CFO Michael Dastoor will be stepping in as interim CEO effective Friday, the company said in a filing with the Securities and Exchange Commission. The move comes after the St. Petersburg, Florida-based company placed its CEO Kenneth Wilson on paid leave April 15, pending the results of an investigation related to corporate policies, according to the filing.
- The conduct “that prompted this review does not relate to, and does not impact, the Company’s financial statements or financial reporting,” the company said in the filing.
- Jabil declined to comment further on the conduct that prompted the C-suite change beyond the details included in its SEC filing. “Trust, accountability, and integrity are core to our company culture, and we are committed to upholding these principles,” a company spokesperson told CFO Dive via email. In his role as interim CEO, Dastoor “will lead the Company during this period with support from the rest of our senior leadership team,” the spokesperson said.
Dive Insight:
Dastoor will continue in his role as CFO as well as serving as interim CEO, the company confirmed.
Shares of the company, which manufactures materials and composites to be used in electronics, automotive or aerospace products among other industries, fell by 2.7% in after-hours trading Thursday following the news.
Dastoor and Wilson are long-time alums of the company, with both having joined Jabil in 2000. Dastoor is taking the interim CEO role just a year after Wilson, who started in the role of business unit coordinator at the company, was promoted to Jabil’s top executive chair, succeeding Mark Mondello in May 2023. Mondello remained as chairman of the board and will continue in that role, according to the Thursday SEC filing.
Dastoor, meanwhile, joined in 2000 as regional controller before being promoted to controller in 2008. He was elevated to the CFO seat in September 2018 following the retirement of Jabil’s long-time finance chief Forbes Alexander, according to a company press release at the time.
The CEO change up comes after the manufacturer reported mixed results for its Q2 of fiscal 2024 earnings in March, with Wilson highlighting “revenue headwinds” the company faced, though he added they expected those headwinds to be short-term. Jabil reported net revenue of $6.7 billion for the quarter ended Feb. 29, compared to $8.1 billion for the prior year period, according to its earnings results. It reported gross profit of $630 million, compared to $661 million in gross profit for Q2 of fiscal 2023.
Dastoor is also taking the interim CEO reins as Jabil continues to execute on a restructuring plan approved by the board last September aimed at realigning “the company’s cost base for stranded costs associated with the company’s sale and realignment of its mobility business,” according to a SEC filing. Jabil sold its mobility business — which manufactured components for consumer electronics — last year to BYD Electronics in a $2.2 billion cash transaction, according to a press release.
Jabil expected to incur costs of $300 million related to the restructuring, which included layoffs across its workforce, according to its October 2023 SEC filing. The company recorded severance and restructuring costs of $70 million for its most recent quarter, after recording $127 million in related costs for its Q1 of fiscal 2024.
