Office Depot and OfficeMax, which agreed to a $1.2 billion merger in February, said Monday that it has narrowed down its selection to five candidates of a new chief executive to lead the combined office-supply companies. The goal is to make a decision by September.
"Our objective is to have a candidate in place prior to the closing of the merger to address critical issues such as headquarters location, company name, culture and strategy," said Nigel Travis, an Office Depot board member and co-chair of the search committee.
The names of the CEO candidates are not being disclosed, said Office Depot spokesman Brian Levine.
Stock analysts consider OfficeMax CEO Ravi Saligram to be the front-runner for the job. Office Depot CEO Neil Austrian, who is 73 years old, has said he will retire if another candidate is found.
The two companies hired executive search firm Korn Fern International in June to assist the CEO search committee, made up of an equal number of board members from Office Depot and OfficeMax.
The merger will result in an $18 billion company aimed at better competing with market leader Staples, as well as discount and online retailers.
Mick Lasher, whose executive search firm Lasher Associates operated in South Florida for 30 years, said the key issue in choosing a CEO is "the vision of the board and what it wants to accomplish."
He said Office Depot and OfficeMax's boards may choose a CEO who has experience in combining major companies.
"Culture is the most difficult thing to change and the most important ingredient for making things work," Lasher said, pointing to ongoing turmoil at another retailer, J.C. Penney. Ron Johnson was hired as CEO in 2011, and he revolutionized its retail concept by having lower everyday prices but fewer sales and promotions .
When the strategy failed, Johnson was replaced. Now hedge-fund tycoon Bill Ackman, a major shareholder in J.C. Penney, is trying to oust the latest CEO who replaced Johnson.
"You can't change the culture overnight," Lasher said.
The CEO search committee is co-chaired by Office Depot's Travis, chairman and CEO of Dunkin' Brands, and OfficeMax board member Jim Marino, former president and CEO of Alberto Culver Co.
In July, Office Depot said it would survey employees about the company culture. In a letter to employees, Austrian also said the company was establishing a "network of Change Champions" to share information and bring employee concerns to leadership.
Levine said the details of the employee survey are being shared with employees, but will not be made public.
The merger, which the companies hope to close by year-end, is under review by the Federal Trade Commission. Office Depot and OfficeMax shareholders approved the merger in July.
Office Depot holds its annual meeting Aug. 21 in Boca Raton, where shareholders will vote on a new board of directors.
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