Vale CEO Ousted as Brazil Seeks New Blood Before Reorganization – by Sabrina Valle and Peter Millard (Bloomberg News – February 24, 2017)

https://www.bloomberg.com/

Brazil is moving to cast off the last shackles of government influence at iron-ore giant Vale SA — but not before replacing the CEO with someone more politically palatable.

Murilo Ferreira’s six-year contract won’t be renewed when it expires in May, the Rio de Janeiro-based company said in a statement Friday. The announcement came days after Vale unveiled a plan to scrap its controlling shareholder pact amid criticism the miner was run like a quasi state company.

While the company didn’t say who decided Ferreira’s fate, analysts including Upside Investor’s Pedro Galdi say politics were involved. He took the CEO job in 2011 as part of a management shakeup driven by then-president Dilma Rousseff. The current government of Michel Temer has sought to distance itself from authorities and executives with perceived allegiances to Rousseff, who was impeached last year.

“Clearly this is a political decision and Temer will have the final say in appointing the new CEO,” Galdi said by telephone from Sao Paulo. “This should be the last time there is political interference in appointing a CEO, as Vale is breaking down control.”

Brazil’s presidency didn’t respond to e-mails requesting comment. Vale’s shares fell 0.5 percent in Sao Paulo on Friday.Under Ferreira, 63, the company has been on a roller coaster ride. Over that period, Vale’s shares lost about 30 percent as commodity prices tumbled amid slowing Chinese demand and expanding supply. In the past year, though, there’s been a sharp turnaround.

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