APV chief's payoff may be pounds 500,000: Engineer says Strowger departure settlement will be below average

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The Independent Online
CLIVE STROWGER, chief executive of APV, the engineering concern, is leaving the company with a compensation package that could reach pounds 500,000, a month after the company cut its interim dividend and issued a profits warning.

Mr Strowger had a two-year rolling contract, the company said. Last year he was paid a basic salary of pounds 225,000, a pounds 16,875 bonus and pounds 98,000 in benefits, making a total of pounds 340,000.

However, Sir Peter Cazalet, chairman, said the departing executive would not be taking his full entitlement. 'Both sides recognise the need to mitigate the size of the settlement, therefore I think we can expect a settlement below the average size of two years' salary,' he said.

He will be replaced by Neil French, 44, finance director since 1989, until the board makes a further announcement. Dr French acted as chief executive in a previous interregnum, but is now regarded as a front-runner to take the job permanently.

Mr Strowger, 52, was appointed chief executive of the food- manufacturing machinery company in July 1992.

He had made his reputation during a 12-year term at GrandMet that culminated in his appointment as finance director. But his move to Mountleigh, the troubled property company, ended badly after he threw his lot in with US entrepreneurs Nelson Peltz and Peter May with the idea of turning the company into an international business. The episode ended in the Stock Exchange criticising the company's directors.

At APV he was criticised for failing to implement a radical restructuring quickly enough.

In the 1980s APV had embarked on an acquisitive binge which left the company with 100 sites in 10 countries, but it failed to integrate the new businesses. When the recession started, profits dived from pounds 60m in 1989 to losses in 1992 of pounds 10m on a total turnover of pounds 947m.

Mr Strowger inherited a strategy of simplifying the complicated corporate structure and focusing the company's production on key markets. He strengthened the balance sheet by selling Vent Axia for pounds 56m and cutting the number of sites.

However, margins continued to shrink and orders to wither as competition intensified.

In September the shares fell by 30 per cent from 118p to 83p after Mr Strowger dismayed the City by cutting the interim dividend and warning that the company faced even more pressure on profit margins. Since then he has overhauled the company's systems.

(Photograph omitted)

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