Thomson Reuters CEO Tom Glocer is stepping down and will be replaced by an executive with closer ties to the family that owns a controlling interest in one of the world's largest news and information companies.
The change in command, announced Thursday, will take effect Jan. 1 when James Smith becomes Thomson Reuters Corp.'s new CEO. It is Smith's second promotion of the autumn; he was promoted to chief operating officer in late September.
Thomson Reuters has been shaking things up during the past six months amid dissatisfaction with the performance of its markets division, which accounts for more than half of the company's revenue.
The company's overall earnings have risen this year. But the markets division, which primarily sells data and analytical tools to financial institutions, hasn't been growing fast enough to please investors. The company's stock price, which closed Thursday at $26.88, has dropped 29 percent so far this year.
The decline translates to a nearly $5 billion loss on paper for the Thomson family, which owns a 55 percent stake in the company through the Woodbridge Co.
Glocer's departure was described as a retirement. But Glocer, 52, didn't sound ready to leave in September when Smith was anointed as his heir apparent.
"I'm going to stay for a good long time to fix and thrive under this business," Glocer said in an interview with Reuters' own news service at that time.
In a Thursday statement, Glocer said he had achieved his goals. "By the end of this year, the organizational, strategy and budget work I have been leading will be complete, and the transition plan I launched last summer will have achieved its objectives," Glocer said. In addition to giving up the CEO job, Glocer is resigning from Thomson Reuters' board of directors at the end of the year.
Glocer became the first American to lead Reuters Group when he became CEO in 2001. He quickly won over investors by cutting thousands of jobs to boost the company's earnings and then oversaw improvements in its financial trading products to be more competitive with Bloomberg and Dow Jones, which is now owned by News Corp.
Those efforts helped lead to Reuters' sale to Thomson Corp. for about $16 billion in 2008. The Thomson family thought so highly of Glocer's performance that he became CEO of the combined company.
"Tom will be remembered as the individual who turned around Reuters 10 years ago, led the company to growth and guided its sale to form Thomson Reuters," company Chairman David Thomson said in a statement.
Smith, 52, has a long relationship with the Thomson family. He joined the Thomson Newspaper group in 1987, where he remained until 2000 when that business was sold. He then moved to the Thomson Corp., where he worked his way up to chief operating officer leading up to the Reuters deal.
David Thomson, the third generation of his family to be involved in the company, said Smith "has earned the respect and confidence of his colleagues and the board alike."
As part of its latest reorganization, Thomson Reuters is creating five business units whose top executives will report to Smith. They are: David Craig, president of financial and risk: Mike Suchsland, president of legal; Chris Kibarian, president of intellectual property and science; Brian Peccarelli, president of tax and accounting; and Shanker Ramamurthy, president of global growth organization.
Steven Adler, the top editor at Reuters news service, also will report directly to Smith. The news service has been expanding its coverage recently.
The changes at Thomson Reuters will result in a charge against its fourth-quarter earnings, according to the company. Excluding those charges, the company affirmed its guidance for that period.
Through the first nine months of this year, Thomson Reuters earned $1.2 billion on revenue of $10.2 billion. At the same point last year, the company had earned $708 million on revenue of $9.6 billion.