Investing.com -- Yum! Brands Inc (N:YUM) announced on Tuesday that executive chairman David Novak intends to retire in May, following the company's annual shareholder meeting.
Novak, 63, also said on Tuesday that he will step down from the company's Board of Directors at that time. Yum Brands board plans to appoint a new Non-Executive Chairman from its Board of Directors and will make the announcement at the meeting.
Yum Brands, which owns prominent fast-food chains such as KFC, Taco Bell and Pizza Hut, is in the midst of a major transition after it spun off its China division in October. The new company, Yum China, is expected to launch at some point this year.
Yum, which derives more than half of its total revenues from China, suffered its worst daily decline in more than 12 years in October, after it missed third quarter profit forecasts, amid slow sales in the world's second-largest economy. Weeks earlier, activist investor Keith Meister said the company could bolster its value by as much as $7 billion by splitting its China business into a separate, publicly traded company.
“I feel deeply privileged to have served over the years as Yum! Brands Chairman and CEO,” said Novak. “As we target the separation of our China business by the end of 2016 and transition to two powerful, independent companies, it is a perfect time for me to complete my retirement."
"The two new companies will be led by strong, highly capable leaders, Greg Creed at YUM and Micky Pant at YUM China. I am completely confident both of them will take their businesses to the next level and I look forward to cheering them on and supporting them after my retirement." Novak added. "I truly believe these two companies present enormous growth potential in the years to come. Therefore, I plan to remain a shareholder of both companies and couldn't be more enthusiastic about these investments.”
Novak was appointed the company's CEO in 1999 and has served as its chairman since 2000. Last January, Novak moved to executive chairman when he was succeeded as CEO by Creed.
"David Novak is a visionary leader who built Yum! Brands into a global powerhouse and one of the world’s largest restaurant companies. He is renowned for creating a recognition culture that rewards for performance, and for coaching and mentoring thousands of executives on leadership skills," Creed said in a statement.
"During his tenure, the Company expanded its vast footprint in new emerging markets, became the category leader in China, delivered a high return on invested capital and saw its market capitalization grow from $4.6 billion to approximately $31 billion. Shareholders have been well-rewarded over this time thanks to David’s outstanding leadership."
Shares in Yum Brands were flat in after-hours trading, after closing at 72.03 in the regular session, down 0.19 or 0.26% on the day.