Breaking news: A new man at Reuters helm
As Tom Glocer steps down as CEO, Sean Farrell reads between the lines
Tom Glocer will step down as chief executive of Thomson Reuters at the end of this year as Canada's Thomson family ousts the last Reuters figure from the top ranks of the company they bought in 2008.
Mr Glocer will be replaced at the top of the news and business information company by James Smith, a Thomson veteran who was made chief operating officer in September. Before that promotion, Mr Smith ran the Thomson professional information business, whose growth made up for stagnant performance at the markets unit which made up of former Reuters' operations.
The blow to Mr Glocer will be softened by a potential payout of pay and shares worth about $38m (£24m). The company declined to comment on severance terms for Mr Glocer, who earned more than $55m in the last three years.
Mr Glocer said: "By the end of this year, the organisational, strategy and budget work I have been leading will be complete, and the transition plan I launched last summer will have achieved its objectives. Jim Smith is a very talented executive with whom I have worked closely over the past four years. He is ready to lead Thomson Reuters."
Thomson Reuters' share price had fallen by about a third since February before yesterday's announcement and the Thomson family had become impatient with Mr Glocer's slow progress in turning round the markets business.
Mr Glocer is credited with saving Reuters, which appeared set to go bust when he took over 11 years ago. The UK company suffered disastrous sales of data terminals in the wake of the dot-com crash and after underestimating competition from US rival Bloomberg.
The former mergers and acquisitions lawyer joined Reuters as deputy general counsel in the US in 1993. He was a surprise choice as chief executive because he was the first American and first non-journalist to head the company in its 150 years. He axed more than 3,000 jobs and, helped by a resumption of the market boom, revived Reuters' share price from less than 100p in 2003 to agree a 692p-a-share takeover by Thomson in May 2007.
David Thomson, chairman of Thomson Reuters, said: "Tom will be remembered as the individual who turned around Reuters 10 years ago."
Mr Glocer stayed on as chief executive of the merged company which combined Reuters' data and news service, aimed at financial investors and traders, with Thomson's information products for lawyers, accountants and other professions. Since the merger, agreed just before the financial crisis, the professional division has consistently outperformed the markets business. Mr Glocer has announced several reorganisations and management shake-ups aimed at addressing the markets business's problems. In July he ousted Devin Wenig, who ran the operation and, who as Mr Glocer's former protege, had been seen as a potential chief executive.
After Mr Wenig's departure, Mr Glocer took direct control of the markets business in a bid to fix the lacklustre performance of the flagship Eikon. The promotion in September of Mr Smith, an ex-journalist who joined Thomson in 1987, marked him out as a possible replacement for Mr Glocer. At the time, Mr Glocer said: "He's always been in the frame as far as I'm concerned."
Mr Smith's promotion and Mr Glocer's removal complete the swallowing up by Thomson of Reuters. The UK firm was established in 1851 by Paul Julius Reuter and broke the news in Europe of Lincoln's assassination in 1865.
In the third quarter of this year, sales at the professional division, which includes the legal publisher Sweet & Maxwell, jumped 10 per cent while markets revenue rose just 1 per cent.
The Thomson family's Woodbridge Company owns about 55 per cent of Thomson Reuters, which is publicly listed in New York and Toronto after abandoning its London listing.
Thomson began with one Canadian newspaper in the 1930s and expanded to own The Times, The Sunday Times and The Scotsman before selling its UK papers to concentrate on professional and academic information.
The Canadian company's ability to transform itself and jettison outdated operations without sentiment was a stark contrast to Reuters' bureaucratic structure and failure to spot the threat to its business model posed by Bloomberg's aggressive expansion.
Thomson Reuters said it was sticking to the business outlook it issued with its third-quarter results a month ago, excluding costs of its management restructure announced yesterday.
A spokesman declined to discuss what the charges could cover.
New Head Boy: James Smith
James Smith, who is set to take over from Tom Glocer in January, is a Thomson veteran who started his career writing copy and last year made a tidy $2.4m in salary and bonus.
This marks a second promotion in three months for the 52-year-old. He was appointed chief operating officer at the end of September following his role as running the company's professional division which oversees data for industries including legal, tax and accounting.
His association with the company stretches back to 1987 when he joined the Thomson Newspaper group after several years as a journalist.
The Marshall University graduate worked in several staff and operating positions at the Canadian group, and it led to his taking over the US operations of the newspaper arm and later his appointment as chief operating officer.
When the whole division was sold off at the turn of the century, he went in house with Thomson Corporation. In 2005 he was put in charge of the group's academic publishing division.
His move to chief operating officer was part of a move by the company to overhaul the structure of the group. Mr Smith will take over as chief executive of the group on January 1 and will set about streamlining the group.
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