Keurig Dr Pepper Reappoints Former CEO After Abrupt Replacement Tenure; Capital Allocation Unchanged

Narrow-moat Keurig Dr Pepper’s C-Suite changes continue, with its current executive chairman and former CEO Bob Gamgort set to reassume the CEO role as Ozan Dokmecioglu steps down from the position after just four months. This abrupt CEO departure is attributable to Dokmecioglu’s violation of company’s code of conduct, and we view the firm's decision as favorable, based on its decisive action to uphold its ethical policies, in line with Sustainalytics’ strong rating for the management of ESG risks. We’ll await formal investigation results to opine on the efficacy of the firm’s candidate vetting process, to the extent that violations could have occurred prior to the promotion. Ultimately, we expect the transition to go smoothly, given Gamgort’s four years in the CEO role since the 2018 merger and his prior position as the CEO of Keurig Green Mountain.