Spark boss Simon Moutter resigned last evening and the company's board settled on customer director Jolie Hodson to replace him the same evening, chairwoman Justine Smyth says.
Asked to clarify when Moutter revealed his intention to step aside, Smyth told the Herald, "Last evening. The Board held a meeting where they resolved to appoint Jolie as the new chief executive, and Jolie accepted the terms of the appointment, subject to us receiving Simon's resignation, at which point Simon tendered his resignation."
Asked if any other candidates were considered, Smyth replied, "The board determined that undertaking a potentially lengthy external search was not required and would not be in the best interests of the company."
The rapid-fire recruitment was possible because the board had already vetted Hodson as a potential replacement for Moutter as part of its contingency planning.
"Spark is proud to have a philosophy of, where appropriate, developing and promoting talent from within," Smyth said.
"As part of our succession planning process, we asked a global executive search firm with considerable experience assessing chief executive candidates - Egon Zehnder - to undertake an external, objective and rigorous assessment of Jolie's abilities.
"This included benchmarking Jolie relative to other executives in the Australia/New Zealand market place. The Board determined that undertaking a potentially lengthy external search was not required and would not be in the best interests of the company."
Moutter's resignation was announced before the market opened this morning. He will be replaced by Hodson on July 1.
The telco's shares fell just over 3 per cent when the NZX opened, and in late trading were down 3.44 per cent to $3.65 - representing around a quarter of a billion dollars wiped from Spark's market cap.
A number of analysts were caught on the hop, including Morning Star, which told analysts, "We are surprised by the planned resignation of current CEO Simon Moutter, especially given the fluid situation facing Spark on key fronts."
In her first interview, Hodson told the Herald she was committed to Spark Sport and other strategies in place.
"We're very comfortable where we are with Spark Sport. We had some things with Bahrain [the second 2019 Grand Prix race] over the weekend. But we're working on getting those resolved so that we're set up well for the Rugby World Cup."
Moutter has recently driven an "agile" restructure of Spark, plus an aggressive drive into sports content and streaming.
The Spark veteran had given the market no indication he was thinking about leaving - and his departure comes as his sports content strategy is still at a key stage, as Spark Sport launches and goes through some wobbles and faces criticism in some quarters that it is over-ambitious.
Did he walk the plank? No reason for his stepping down was given this morning, beyond the old chestnut that he wanted to spend "some quality time with my family."
• Simon Moutter exit prompts 'sell' recommendation
Moutter's total remuneration in 2018 was $2.82 million, plus a long-term incentive bonus of $1m outstanding.
"In terms of timing, at the end of the day there's always something happening in our industry, so there's never a perfect time to leave. This was Simon's choice about what was right for him and his family," Hodson said.
Asked about her priorities, Hodson named her company's pending 5G mobile upgrade (where Moutter has been notably more impatient than his counterparts at Vodafone and 2degrees) and finishing the "agile" restructure initiated by predecessor.
She added, "Spark Sport is definitely a big new initiative for us. We need to make sure that's really successful so that will be a big focus."
There would also be some new points of focus, she said - but she won't discuss them until after he predecessor departs on July 1.
Sam Trethewey, portfolio manager at Milford Asset Management, said Hodson had done a "thorough apprenticeship" for the job.
He added, "The market had been questioning for some time as to when Simon would leave - he has been there for seven years.
"But I think it was something of a surprise - the timing of it - given what Simon has going on and the push into Spark sports."
Mark Lister, head of private wealth research at Craigs Investment Partners, said the fall in the share price was understandable, given Moutter's profile.
"He was a high profile CEO who has done a good job and who was well liked and well known to the investment community here and offshore."
Hodson is rated highly, he said.
"He (Moutter) is a hard act to follow," he said.
"I think Jolie's credibility is strong, but I think the biggest uncertainty will be just that she does not have the track record that Simon does."
Salt Funds MD Matt Goodson said Hodson had clearly been "set" for the role and was well regarded by the market.
Smashing the glass ceiling
Hodson was named Deloitte CFO of the Year in 2016. The same year, she told the Herald she wanted to break through the glass ceiling and become CEO one day.
She will become the second female leader of the company formerly known as Telecom, following Theresa Gattung, who served as CEO between 1999 and 2007.
• Jolie Hodson - Looking beyond the glass ceiling
Moutter served as chief operating officer under Gattung before leaving to become chief executive of Auckland Airport. He returned to Spark in 2012 - then aged 52 - to take the top job.
Foray into sports, but at what cost?
This morning, Spark chairwoman Justine Smyth said when Moutter became MD, he had done so in the expectation of a likely five-to-seven-year tenure.
Moutter was seen by some commentators as a fix-it technocrat who would focus on restructuring the telco's technology, organisation and staffing. He did that, but also initiated a bold move into content, first with Lightbox then Spark Sport.
• World Cup broadband jam: time will run out
Just how bold is still not known. Spark Sport's budget has never been made public.
Moutter has said on several occasions that Spark won't reveal the cost of acquiring and streaming sports content until its first financial results after the Rugby World Cup.
"Simon leaves behind an extensive legacy of reform and redirection at the company formerly known as Telecom," tech commentator Paul Brislen says.
"He took an ex-state monopoly and did something quite unusual - turned it into a competitive retail player in the market. He deserves full credit for that."
Moutter's former number two at Spark, Jason Paris (recently made Vodafone NZ CEO) also paid tribute, tweeting:
Very best wishes on the next phase of your career @simonmoutter. You will go down as one of New Zealand’s greatest business leaders whose contribution to this country isn’t over yet! Congratulations to @jolie_hodson - another outstanding leader whose appointment is well deserved.— Jason Paris (@JasonCParis) April 2, 2019
Telecommunications Users Association head Craig Young said, "Simon has taken the hard choices and transformed Spark from a traditional telco when it split with Chorus and tried to position it for the future.
"It's good to see a quality internal candidate and another Kiwi step into the role in what remains our biggest retail service provider."
Spark's half-year profit fell 5.6 per cent to $153m in the six months to December 31 as it went without its usual profit-share dividend from the Southern Cross Cable - which faces new competition from the Hawaiki Australia-NZ-US cable backed by rich listers Malcolm Dick and Sir Eion Edgar.
Through Moutter's tenure, Spark's share price has climbed to $3.775 from $2.42 when he took over. The telco is also paying out annual dividends of 25 cents per share, compared to the 16 cents paid in his first year.
Salt Funds' Goodson said the news was a "slight surprise but not a shock".
"Moutter been well regarded by the market as having done an excellent job in holding the line with Spark and taking significant costs out of the business at a time when some of the legacy lines have been contracting," he said.
"He's done very well in playing the cards that he was dealt, as seen by the share price performance."
Harbour Asset Management's Shane Solly noted, "Spark management has spent a lot of time recently emphasising there is no risk to spark's dividend."
Who is Jolie Hodson?
Hodson outlined her intentions to become a corporate chief executive as far back as 2016 in an interview with the Herald.
At the time, she was chief financial officer before moving up the ranks to become the chief executive of Spark Digital.
Hodson is an experienced business leader, having joined Spark in 2013 after a 12-year stint in Australia with liquor firm Lion, working her way up the finance division.
Before that, she spent eight years at Deloitte working as an auditor.
Her appointment to the Spark leadership role will make her one of only four women to be running one of the top 50 corporate entities in New Zealand.
The other women are A2 Milk's Jane Hrdlicka, Hallenstein-Glasson's Mary Devine and Chorus' Kate McKenzie.
She has long been outspoken about the importance of increasing gender diversity at a board level in New Zealand.
With reporting by Jamie Gray.