Honeywell CEO Transition: A Time When Its Say Doesn’t Match Its Do
We’re disappointed with the announcement that Darius Adamczyk will step down as Honeywell HON CEO on June 1, 2023. Speaking in his capacity as lead director of the board, Scott Davis touted the company’s “thoughtful leadership transition planning and execution,” as well as “rigorous planning” in CEO-elect Vimal Kapur’s selection. This wording drew parallels to the process that identified Darius Adamczyk as David Cote’s successor. But these words miss the point.
Our quarrel isn’t with Honeywell’s succession process, which we’ve long known is robust. We’re also not surprised by the selection of Kapur, and we think he’s well suited for the role given his decades-long track record of success in increasingly important positions of responsibility at Honeywell, including leading the building technologies and performance materials and technologies segments. However, our disappointment stems from the fact that we feel misled by the timing and our perceived lack of forthrightness of this announcement. The news came not even eight months after CEO Adamczyk said that Kapur’s elevation to COO was not a “repeat of the playbook” that saw Adamczyk ascend as CEO. Of course, part of our disappointment also stems from the fact that we liked Adamczyk and thought he had increased opportunities to put his stamp on Honeywell’s operations and portfolio beyond the Resideo and Garrett Tech spins.
Kapur’s move to COO was ostensibly to free up Adamczyk’s time to contemplate mergers and acquisitions, or M&A. However, aside from the $1.3 billion agreement to purchase quality management software provider Sparta Systems back in late-2020, Honeywell really hasn’t done much in the way of M&A. We concede that evaluating portfolio changes isn’t always abundantly clear to the market, and that prices haven’t always been favorable, but we would have thought Honeywell could have taken advantage during the pandemic-related selloff to deploy more capital, particularly in smaller bolt-on deals.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.