Waters leaves big legacy at Fletcher's

New Fletcher Building CEO Jonathan Ling, left, an outside choice for the job, farewells departing CEO Ralph Waters at the company's Penrose office. Picture / Dean Purcell

Fletcher Building chief executive Ralph Waters is walking away from the building materials firm he has transformed into a national champion over the last five years.

The 57-year-old Australian, who joined Fletcher Building from whiteware company Email in 2001, will step down at the end of August to spend more time with his family.

In an emotionally-charged statement at a press conference in Auckland, Waters spoke of the sacrifices he and his family had made, even during illness, so he could follow his career. Now was the time to hand some back in returning to Sydney.

"You reach a stage in your life when your wife should spend a few less dinners on her own.

"This is something that I should be doing. If it had been my choice it would have been sooner.

"I have been balancing my wishes with those of the organisation, but sooner was not possible because we thought the internal people needed more time under their belts for us to be able to make clearer choices."

Over his tenure, Waters - named businessman of the year by the Herald in 2004 - turned the underperforming company around by cutting costs and streamlining it.

He spent more than $1.6 billion buying steel, panels and insulation makers and drove an eightfold increase in earnings.

Meanwhile, Fletcher Building's shares have quadrupled in worth, taking its market value to $4.5 billion and making it New Zealand's third-largest listed company.

Waters will be replaced by the laminates and panel division head, Australian Jonathan Ling, 52.

Waters will stay on at Fletcher Building as a board member, adding to his existing non-executive board role at Fisher & Paykel Appliances.

His impending departure, a subject of intense speculation for more than a year, was greeted with a measure of disappointment from large investors and with accolades for his achievements.

"[Waters] has got more important things going on," said Brook Asset management chairman Simon Botherway.

"He is a loss. He has been a fabulous manager of the business, an outstanding chief executive."

Fletcher Building's shares fell from recent record highs to end the day down 9 cents a $9.61 amid talk that Ling's succession to the top job could prompt a shake-out among Fletcher Building's top management.

Ling was an outside choice for many, although he is well thought of.

Building products division chief Andrew Reding and infrastructure division head Mark Binns were thought to be the other internal candidates.

Of the two, Reding was seen as the top contender because he was running the division that most resembled the larger company.

"There is always a bit of uncertainty when a new CEO is appointed," said another fund manager. "We should not be surprised that there is some market nervousness."

Waters said internal candidates who missed out on the job were deeply disappointed.

"I would also say they were man enough to handle it when we had a drink with Jonathan and his wife last night.

"It is hard to be there and put on a brave face, but I think it was a measure of what they are made of that they did."

Fletcher Building chairman Roderick Deane said: "You need to be realistic that some may be [considering] their positions. They have put a lot into the company."

Dean said Waters, who retains more than 1.3 million shares in the company, had made a "hugely valuable" contribution to Fletcher Building over the last five years and had provided outstanding leadership.


Bonus for those who join Kiwisaver

Many of Fletcher Building's 10,000 New Zealand workers are in for a bonus if they sign up to the Government's Kiwisaver superannuation scheme.

Fletcher Building said yesterday that those who make a minimum payment into the scheme of 4 per cent of their salary annually will get a 2 per cent top-up from the company.

Waters said the top-up would cost the company between $1.5 million and $4 million per year.

"We think it is a smart plan and should encourage people to participate."

Kiwisaver is a voluntary workplace scheme giving individuals personalised superannuation accounts that can be transported from job to job.

New employees are enrolled automatically, but are given six weeks to opt out.