OPINION: New chief executives for two of the country's most high profile companies were announced this week - Christopher Luxon replacing Rob Fyfe at Air New Zealand and Mark Adamson taking over at Fletcher Building from Jonathan Ling.

Fyfe had signalled his move in January, allowing plenty of time to groom his successor who will take over in December. Likewise, there had been media speculation in recent weeks that Ling advised two months ago he wanted to step down. His replacement takes over in October.

Neither move is a huge surprise given the average tenure for the CEO of a listed company these days is around the three to four-year mark. Fyfe has been boss at Air NZ since late 2005 while Ling has run Fletcher Building since May 2006, tenures of seven and six years respectively.

While they are in completely different industries, there are some similarities between the two including both will take a break before deciding what to do next. They also have a tendency to speak their mind, are generally well-respected for how they have run their companies, and did a stint within their companies before being appointed CEO.

Another key, and less flattering, similarity is that the pair have seen the share price of their companies dive during their reign.

Air New Zealand's share price when Fyfe was promoted to CEO in October 2005 was $1.18 per share. It peaked at $3.12 in mid-2007 and is currently languishing at just 0.87 cents - a 26 per cent drop from when he started. That compares to the NZX50 gaining 1.46 per cent over the same period.

Likewise, the share price at Fletcher Building was $9.10 when he became the boss in May 2006. The share price hit a peak of $13.27 in May 2007 before gradually retreating back to the current $6.23, a 31.5 per cent fall over Ling's tenure.

That compares to the NZX50 index falling 7.4 per cent over the same period.

So there's a substantial difference in the share price performance of Air New Zealand and Fletcher Building relative to the overall market during the outgoing CEOs' tenure.

Another important measure for investors is earnings per share - the net profit divided by the shares on issue - which have also fallen dramatically in both companies.

Air New Zealand's earnings per share for the year to June 30, 2005 was 21.4c compared to 7.6c in the 2011 financial year. At Fletchers, earnings per share have dropped from 81.3 cents per share in June 30, 2006 to 53.8c in June 30, 2011.

Given the ultimate job of a CEO is to add value for shareholders, you'd have to ask if Fyfe and Ling have lived up to their hype.

That's too simplistic, in my view, because it doesn't take into account the conditions of the day. There was the "little" matter of a global financial crisis from 2008 that hit both the building and airline industries particularly hard.

You could argue the CEOs have done a good job of steering their boats and keeping them afloat through troubled waters. That's certainly the line Fletcher chair Ralph Waters took at the press conference announcing Ling's successor.

In other words, without them there, it could have been worse.

Where the similiarities end between the two men is over acquisitions.

Ling has been on the global acquisition trail, wanting to further reduce Fletcher's vulnerability to the cyclical nature of New Zealand's building industry. It was the right strategy but analysts have criticised him for paying too much for the two major acquisitions he's made that have almost doubled the company's size. 

He paid $1.3 billion for laminates company Formica in 2007 at the peak of the market and a further $1.3b for Australian-based plastic pipes and trade supplier Crane Group last year.

Formica has since been turned around after restructuring but the jury is still out on the extracting full value from the Crane deal.

As an aside, the Australian-born Ling recently had a dig in The Australian newspaper at the big brother, little brother syndrome between the two countries which he said was now becoming "unhealthily intense" on this side of the Tasman.

He said New Zealand had a "relationship" approach to doing business rather than Australia's "winning" culture.

That doesn't translate to rugby, of course.

- © Fairfax NZ News