ritish American Tobacco (BAT) has parted ways with its CEO, Jack Bowles, and appointed finance director Tadeu Marroco as his replacement. The move comes as the tobacco giant seeks to further transition into the vaping market. Bowles’ departure, effective immediately, has sparked talks about a compensation package, which is likely to be substantial given his previous salary of £9.6 million and concern over executive pay among shareholders. Marroco, a 30-year veteran of the company, will oversee the shift away from traditional tobacco and towards vaping products for BAT, valued at £75 billion, which owns brands including Vype, Kool, Pall Mall, and Dunhill.
BAT is one of the ten largest stocks on the London stock exchange, but was recently fined $629 million by the US Department of Justice for violating sanctions while conducting business in North Korea. Although it is unclear whether this played a role in the decision to replace Bowles, some have speculated that this may have been the right time for a leadership change as the company pivots towards a new direction. Chairman Luc Jobin said that Marroco’s appointment was made because of “his outstanding track record of developing teams that deliver on our transformation alongside a consistent focus on strong execution and financial performance.”
Vaping products now account for 15% of BAT’s total sales, or about £3 billion, with the category expected to become profitable next year. Marroco will be paid a basic salary of £1.34 million plus £200,000 into his pension, and will be expected to build up share ownership equal to five times his pay to align his interests with other investors. Bowles, who has been at the helm since 2019, said: “It is now the time for a change of leadership to take the business to the next level.”