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Business News

BAE stands by chairman after call to resign

BAE Systems was forced to defend chairman Dick Olver's position yesterday as the pressure mounted on him to resign following the collapse of the defence group's proposed £30bn merger with EADS.

The company was spurred into action after a group of shareholders, led by Invesco Perpetual and representing 18 per cent of BAE's shares, called on Mr Olver – and senior independent director Sir Peter Mason – to stand down.

BAE said it "remains fully supportive of its directors", adding that Mr Olver is due to retire in 2014 as set out in the company's succession plan.

"At the request of the board and in order to facilitate an orderly transition to his successor, the chairman agreed in 2011 to remain in office for up to a year beyond the expiry of his third term in May 2013," BAE said.

The company insisted Mr Olver would remain at the company for the full year after his third term expires and not step down until the annual shareholders' meeting in May 2014, despite growing expectations that he will not stay that long.

Shares in BAE fell by 7.6p to 305.7p.