Amey chief quits with £287,000 pay-off

The chief executive of Amey, Brian Staples, finally bowed to mounting shareholder pressure yesterday by quitting the ailing PFI contractor.

Mr Staples, who has presided over a 90 per cent collapse in the company's share price in the past year, will leave Amey at the end of February and will receive a six-month pay-off worth £287,000.

News of his departure sent Amey's shares 13 per cent higher and came just two days after the company was finally awarded a £4.4bn contract to take over part of London Underground as a member of the Tube Lines consortium.

The severance deal comprises £202,000 in salary and £85,000 in pension contributions and is half the amount Mr Staples had been entitled to under his contract. It will also be paid monthly so that if Mr Staples gets a job within the six-month period, then payments will cease.

The scaling back of the pay-off is likely to placate big shareholders and corporate governance groups who have increasingly vented their anger at "rewards for failure".

Talal Shakerchi of Meditor Capital Management, Amey's biggest shareholder with a 15 per cent stake, said: "This is not as scary a number as some of those which have been bandied about. You also have to factor in the time, energy and legal costs which the company would have entailed in challenging any pay-off."

The National Association of Pension Funds, which represents big institutional shareholders, said it was important for companies to mitigate compensation payments to executives of failed companies, particularly where there had been destruction of shareholder value.

A spokesman said: "Considering that the contractual entitlement was a year's money, the company feels it has done a pretty good job on behalf of shareholders by reducing this to six months." Asked whether Mr Staples had resigned or been ousted, he added: "This is an action taken by the board but done with Brian's co-operation."

Mr Staples' position at Amey had looked increasingly untenable after two profit warnings in the space of less than a month. The company has also been forced to scrap its dividend and is currently in talks about a financial rescue with its banks.

In a brief statement to the Stock Exchange, Amey said Mel Ewell, currently group operations director, had been appointed chief operating officer with immediate effect. He will report direct to Sir Ian Robinson, who moves from non-executive chairman to full-time executive chairman.

Mr Ewell, 44, joined Amey a year ago from Securicor. He will work alongside Eric Tracey, the company's acting finance director, who was parachuted into Amey from Deloitte & Touche in October after the abrupt departure of Michael Kayser after just five weeks in the job. Amey said it would be some months before it decided whether to appoint a new chief executive. The obvious candidate is Mr Ewell.

The company's troubles date back to March last year when it announced a radical change in accounting policies which had the effect of turning a £56m profit into an £18m loss. In the past year, the shares have slumped from a high of 413p to last night's close of 30.5p – up 13 per cent on the day.

Ironically, the announcement of Mr Staples' departure coincided with the first piece of good news Amey shareholders have received in months. The company said it expected to make a £16m profit this year from its one-third stake in Tube Lines, which has taken over the Northern, Jubilee and Piccadilly lines.