Ex-Eurotherm chief lobbied key investor

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The Independent Online
Claes Hultman, ousted chief executive of Eurotherm, outraged fellow directors by lobbying shareholder Mercury Asset Management - the investment company headed by the City's most powerful woman, Carol Galley - before asking the board to make him executive chairman.

Even some of those who supported his bid during last week's boardroom battle at the industrial controls maker thought he was out of line, according to a well-placed source: "It was a housekeeping issue and should have been left to the board."

Mr Hultman, who is also chairman of Wembley, made no secret of the contact, using it as an argument when he tried to persuade Eurotherm's non-executive directors to back him. Joint broker SBC Warburg - which resigned after his departure - is believed to have approached the company on behalf of MAM, although it did not influence the outcome.

Under Ms Galley, MAM has been a prominent player in several big corporate upheavals, including the Granada takeovers of London Weekend Television and the Forte hotel and restaurant chain. Although MAM could spearhead a revolt in an attempt to reverse the decision, insiders are confident it would fail.

"Mr Hultman had talked to MAM, believing if he had enough shareholder support he could swing the issue," said the source. "But he wasn't brought in here by shareholders. He was recruited by the chairman."

The ambitious executive, who earned pounds 643,000 last year and has options worth pounds 1.5m, admitted that he had discussed his promotion, but refused to say with whom. "There were all sorts of consultations about all sorts of issues," he said.

The topic was raised officially as one possible solution to succession problems at the company during a discussion with the chairman of the remuneration committee on Monday. Mr Hultman said he felt he was ambushed at the board meeting that followed on Wednesday. "I did not go in knowing what was on the table." Mr Hultman is well regarded in the City - which has seen Eurotherm's profits soar from pounds 7m to pounds 34m during his five years in office - and is tipped as a likely candidate to take on an FT- SE 100 company when one becomes available. However, he insists he is not in talks with any other potential employers.

Both sides said there was no animosity after the bust-up. "I'm proud of what I've done here," said Mr Hultman. "I feel just as if I had graduated from high school." He is leaving today for a family holiday in his native Sweden but is expected back to work at least part of his six- month notice period.

The remaining board, led by founder and chairman Dr Jack Leonard, will be hard pressed this week trying to calm irate shareholders, including MAM, who have been impressed by the turnaround.

It will be a key test for Peter Wade, the new chief operating officer, who is a possible candidate for the chief executive's job but is thought to need more experience in City diplomacy.