BG Group parted company with its chief executive Chris Finlayson yesterday as he paid the price for a disastrous 16 months at the helm of the FTSE 100 oil and gas explorer.
Mr Finlayson, who took over from long-serving Sir Frank Chapman at the beginning of last year, will leave with £1.3m in notice payments and pension entitlements after the board accepted his resignation for “personal reasons” at a weekend meeting – his minimum contractual entitlement.
He is understood not to have another job to go to and the chairman Andrew Gould has taken over on an interim basis.
Startled analysts compared Mr Finlayson’s demise with that of David Moyes, sacked last week 10 months into succeeding Sir Alex Ferguson as manager of Manchester United. In an unusually blunt statement Mr Gould said: “The board felt that it was in the best interests of the group to accept Chris’s resignation and seek fresh leadership.”
Mr Finlayson sought to strike a different tone from Sir Frank, who was renowned for his autocratic style in the 12 years he led the company.
But since taking over Mr Finlayson has presided over a succession of profit warnings and a 37 per cent slump in annual profits following a year blighted by problems in Egypt, which accounts for about a fifth of production.
It is understood concern among the group’s major shareholders reached fever pitch over Mr Finlayson’s suitability to push forward BG’s strategy, which was unveiled in May last year. This included BG concentrating on fewer production assets as well as bringing in outside investors to generate cash from assets at different stages to recycle into early growth opportunities.
Sources said the 30-year veteran of Royal Dutch Shell, was seen more as a manager and engineer and lacking in deal-making expertise. The group is sticking to the current strategy but there was more disappointment on Egypt yesterday as BG warned production would be at the lower end of its expected range. It has also dropped its 2015 guidance.
In a note entitled “No longer the Chosen One?” Neill Morton, an analyst at Investec, called the departure “strange”. Mr Morton said: “He cites ‘personal reasons’ yet the board seems happy to usher him through the exit while reiterating its commitment to his strategy.
“His focus was on project delivery and Brazil and Australia still appear to be on track. Egypt may have deteriorated, but this is a political situation over which Mr Finlayson had little control.”
BG shares, which have underperformed the FTSE 100 in the past year, closed up 1p at 1,146p. About 8 per cent of its shareholders are private investors, a hangover from the 1986 “Tell Sid” privatisation of British Gas.Reuse content