Could the top man from the Pru be shown the door?
Friday 20 May 2011
The chairman of Prudential, Harvey McGrath, faced questions about his future yesterday after he suffered a shareholder revolt at the company's annual meeting.
In an unusual show of disapproval, 22 per cent of votes were cast against Mr McGrath's re-election to the board. Including abstentions, 27 per cent failed to support him. Mr McGrath bore the brunt of investors' anger for the British insurer's disastrous £22bn attempt to take over its Asian rival AIA last year. By contrast, his chief executive, Tidjane Thiam, received 99 per cent of votes in favour.
Mr Thiam was also vilified for his role in the failed takeover but he has since improved the Pru's operational performance, whereas Mr McGrath is still blamed for the board's failings in its conduct of the deal.
One fund manager who was critical of the deal said: "That is a large chunk of investors voting against and I think he is probably on borrowed time."
Mr McGrath said: "Getting the support of 80 per cent of the shareholders is a pretty good mandate and we will take it forward on that basis. The chairman becomes the lightning rod for shareholders' issues at large."
He told the meeting in London there was still "more work to be done" to repair relations with investors after the failure of the AIA approach, which cost the Pru £377m before tax, including a break fee and advisers' bills.
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