GO
Loading...

UPDATE 2-Avon says Andrea Jung to leave board at end of year

* Jung to stay on as a senior advisor through April 2014

* Fred Hassan to become nonexecutive chairman in January

* Move shows transition moving ahead under McCoy-analysts

* Shares up nearly 6 percent

(Adds details on Jung's tenure, analysts' comments)

By Jessica Wohl

Oct 5 (Reuters) - Avon Products Inc said Executive Chairman Andrea Jung, who was replaced as chief executive officer in April, would step down from the board at the end of 2012, ending what became a tumultuous tenure in recent years and sending the company's shares up nearly 6 percent.

Jung will stay on as a senior advisor, the world's largest direct seller of beauty products said on Friday. She became CEO in 1999 and was often a big draw for Avon direct sales representatives, who liked to see a successful woman at the top of the company.

She was pushed out of the CEO post after a number of missteps by the company, ranging from poorly executed restructuring and missed earnings to a foreign bribery probe.

Jung was credited with helping the company grow in the late 1990s and early 2000s, as it continued to expand around the world. She also gained prominence outside Avon and continues to sit on the boards of Apple Inc and General Electric Co .

In December, Avon said it would replace Jung as CEO after the company's North American business suffered and it failed to keep up with competitors in major markets such as Brazil and Russia.

"Jung's exit marks the end of the transition to the new management team at Avon, which should be positively received by the market," said Atlantic Equities analyst Victoria Collin.

Shares of Avon rose 5.8 percent to $17.16 in morning trading.

Johnson & Johnson senior executive Sherilyn McCoy became Avon's CEO in April . Her appointment followed other management changes, such as the hiring of Chief Financial Officer Kimberly Ross, who started her job in November.

Jung's departure "is further evidence that the company is rebuilding its capabilities and reputation," said BMO Capital Markets analyst Connie Maneaty.

HASSAN NAMED NONEXECUTIVE CHAIRMAN

In April, Avon said Jung would be its executive chairman for two years. Instead, she will assume the senior advisor role on Jan. 1, and her contract for that position will run through April 2014, the company said.

Jung, 54, will maintain her base salary of $1 million and other compensation and benefits, a spokeswoman said.

Fred Hassan will become Avon's nonexecutive chairman on Jan. 1. Hassan, currently Avon's lead independent director, is a managing director and partner at private equity firm Warburg Pincus and was chairman and CEO of Schering-Plough Corp from 2003 until 2009. He has been on Avon's board since 1999.

Jung joined Avon in January 1994 as president of product marketing for Avon U.S. and has been on the board since 1998.

(Reporting by Jessica Wohl and Brad Dorfman in Chicago; Editing by Gerald E. McCormick and Lisa Von Ahn)

((jessica.wohl@thomsonreuters.com)(312)(408-8132)(Reuters

Messaging: jessica.wohl.thomsonreuters.com@reuters.net))

Keywords: AVON JUNG/

Symbol
Price
 
Change
%Change
JNJ
---
AAPL
---
AVP
---