Water technology provider Xylem has promoted its operations chief to the CEO role and appointed an outsider as its new chief financial officer, a month after short seller Spruce Point Capital Management questioned the company’s financials and dealmaking.
Xylem said on Tuesday that CEO Patrick Decker would retire at the end of the year and be replaced by Matthew Pine, the company’s chief operating officer. The water technology company also said that Chief Financial Officer Sandra Rowland is leaving ‘‘to pursue new and different opportunities,’’ with IDEX executive William Grogan taking over as Xylem’s new finance chief.
Spruce Point, which last month published a short report on Xylem and called for Decker’s resignation, said in an emailed statement on Tuesday that while the CEO succession might be seen as telegraphed, Rowland’s exit appears unplanned ‘‘and should put investors on red alert.’’
‘‘Afterall, Spruce Point identified multiple errors, financial reporting and accounting shenanigans that led us to question leadership,’’ said the short seller, adding that both executive departures ‘‘only bolsters’’ these concerns.
Xylem shares were down 4.6% at $97.86 each as of 11 a.m. EDT Tuesday. They were quoted at around $105 just before the short report, in which Spruce Point put a downside target of 30% to 45% on the stock.
When announcing the top echelon changes Tuesday, Xylem also reiterated its third-quarter and full-year 2023 guidance. Spruce Point called the company’s statement ‘‘smoke and mirrors.’’ Last month, Xylem raised its 2023 revenue outlook to $7.2 billion.