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Rentokil Initial (RTO) 90.2p

The chief executive and chairman have left troubled hygiene group Rentokil Initial after a string of profit warnings. Three former directors of chemicals giant ICI have been drafted in to save the business. (Read the full story: www.sharesmagazine.com/node/3729)

Shares says: CEO Doug Flynn and chairman Brian McGowan’s jobs have been under pressure for several months after Rentokil failed to deliver on a recovery plan. Their departures come after a messy period. The ex-ICI directors have a good reputation and should see a quick turnaround – if the business is not damaged beyond repair. Several underperforming divisions have already been sold and a strategic review carried out. There will no doubt be another group-wide business review and costs slashed where possible. Worth sitting on the shares until the new management have identified all the problems. HOLD

The City - Evolution says: The market wanted and has got change of leadership. This team is fresh from success in creating value at ICI, not just through the final exit but over years through an effective change programme. The new management comes as a no-nonsense team with the experience and quality to get to grips with the Rentokil portfolio and build shareholder value through operational actions and reshaping the mix. We expect shareholders to be delighted and the market to respond positively with the team appointed and the speed of change achieved after last month’s profit warning.

The Independent says: Desperate times call for desperate measures. That was the explanation Rentokil Initial was giving yesterday for the highly generous remuneration packages it has agreed to lavish on a trio of new executives it hopes can right the rat-catcher. They will pocket more than £94 million if they can quadruple the share price in the next five years. Unlike conventional bonus structures, under which a share performance is indexed to peers or the wider market, the deal for Rentokil’s new team is based on absolute share price performance. As they are taking over at a low point for the company operationally, amid a market that has already fallen sharply, critics will argue the company can only go up from here. The new management still has its work cut out.