Over 10 years Caltex has outperformed the market in total shareholder return terms by 72 per cent. But in the last five years it has underperformed by 25 per cent, which tells you everything you need to know about why Julian Segal is leaving the company.

After 10 years as boss, he and chair Stephen Gregg thought it was time to look for a new boss for the company.

After reporting three profit downgrades this year, the clock, as noted back in June, was starting to tick loudly.

Being Caltex, the handover will take some time. But while much public attention has focused on the retail side of the business, it is likely the Segal replacement will be from the fuel side.

A standout candidate is Louise Warner, who has spent most of her career at the company. After establishing Caltex’s Singapore office, she is now boss of fuels and infrastructure. This is the company’s engine room, reporting earnings before interest and tax of $570 million last year, compared to $307 million for retail.

There is no correct formula, but 10 years in the CEO role is long enough for most and Segal leaves with strong plaudits from the board. His exit was said to be a mutual decision.

His term included the $4.6 billion sell down by Chevron in March 2015 at $34.20 a share, which just happened to almost coincide with the recent top in the company’s share price. Caltex was up 1.3 per cent at $26.68 a share in lunchtime trade.

Segal’s signature move was closing the Kurnell oil refinery in 2014 and turning it into an import facility.

After the trademark 554 reviews and consultants’ reports, he has also followed BP into turning his retail sites into up-market convenience stores known as ‘The Foodary’. The idea is that as retail fuel inevitably declines the sites will also generate more from non-food sales.

Segal also responded to staff underpayment problems in his franchise network by making the big step of buying out all the franchisees. The terms of the deal meant no matter how good a job they did, they got zero goodwill on the way out. Segal has noted this was simply part of the contract.

Yet the odds suggest Segal may do a little better on his exit.

Extracted from The Australian