(Bloomberg) — WiseTech Global Ltd. shares rebounded immediately after Chief Executive Officer Richard White shifted to a different role in a bid to defuse damaging allegations about his behavior with women.
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Shares in the Australian freight-software company jumped 13% in Sydney trading Friday, recovering much of this week’s losses. The company’s market capitalization had slumped more than A$7.7 billion ($5.1 billion) in the previous four days after a series of ever-worsening media reports and claims about White.
White is taking a short break before starting a new role focused on product and business development, WiseTech said late Thursday. His new 10-year contract as a consultant comes with a two-year notice period, while his A$1 million annual salary is unchanged.
The switch allows WiseTech to hold on to White — the company’s co-founder, largest shareholder, and arguably its most important asset — while officially stripping him of the top job.
The move appears to have appeased the nation’s largest pension fund, the A$341 billion AustralianSuper, which is the fourth- largest shareholder in WiseTech. The fund said it had engaged “extensively” with WiseTech’s board and management over the past two weeks.
“The fund notes that the WiseTech board has engaged appropriate experts to review the specific issues raised and we support this approach,” an AustralianSuper spokesman said in an email. “We remain a long-term investor in WiseTech and consider its long-term value proposition as strong.” AustralianSuper owns an almost 3% stake in WiseTech, company filings show.
‘Compelling Opportunity’
With no sign that White is leaving any time soon, banks including Goldman Sachs Group Inc. and Citigroup Inc. told investors to buy the stock again.
“This announcement is a significant step towards resolving the uncertainty,” Goldman analysts led by Kane Hannan said in a note, upgrading WiseTech stock to a buy. “The significant selloff presents a compelling opportunity to buy one of Australia’s best global growth stories.”
White’s long-term contract in his new role highlights his commitment to the company, Hannan wrote.
White’s resignation as CEO followed accusations that he’d paid millions of dollars to a former partner to settle allegations of inappropriate behavior. The Australian Financial Review reported a former board member at WiseTech had accused White of intimidation and bullying. The newspaper also said White had a years-long relationship with an employee before gifting her a A$7 million waterfront house in Melbourne.