Siemens to replace CEO after failing to meet profit margin goal
In May 2007, Siemens AG appointed Peter Loescher to be the company's chief executive officer. The appointment was done after Siemens AG was confronted with a number of corruption issues. After Loescher assumed office, the company's investors responded and gave Siemens' stock a push to a six-year high.
Last weekend, Siemens AG investors lost their patience with CEO Loescher's performance. Loescher's expansion move and expensive purchases of green energy resulted in a cut in the company's profit forecast. As a result, the officials of the Siemens' board have asked to kick Loescher out from his current seat. The results were expected to be delivered during the scheduled meeting of the company dated on July 31.
A 12% goal on sales was expected from Loescher to achieve. However, he failed to deliver the profit margin goal, of which underlined a huge challenge to his possible successor, Joe Kaeser. According to Norway-based Skagen AS, one of Siemen's stakeholders through Stavanger's chief investment officer, Kristian Falnes, the 12% profit margin goal was achievable and that Loescher's failure to reach it caused the company great disappointment and the resulting plan to ouster.