Lloyds TSB ousted Philip Hampton, its finance director, yesterday after a boardroom bust up with the bank's chief executive over the company's growth and dividend strategy.
Lloyds said it had terminated Mr Hampton's contract with immediate effect. Mike Fairey, deputy chief executive, will take over as finance director until a permanent successor is found.
Mr Hampton, 50, is entitled to one year's salary, currently £483,000, and a bonus which has yet to be finalised. If he secures a new job within 12 months, his pay-off will be cut short.
Lloyds shares fell as much as 2 per cent yesterday as the abruptness of Mr Hampton's departure took the City by surprise.
Mr Hampton was behind demergers at British Gas and at British Telecom, where he helped cut £11.4bn of debt by demerging the mobile business mmO2 from the group.
Analysts had noticed a growing rift between Mr Hampton and Eric Daniels, who became chief executive last summer, over the future direction of the company, but had hoped the tensions could be resolved.
"There has been evidence of difference in strategy over the dividend and capital between the two for some time," one analyst said.
"Sometimes, briefings with one director would give an entirely opposite message to briefings by the other. The differences have obviously become irreconcilable and he had to go. Boards must be united."
Lloyds' dividend, which yields a high 7.5 per cent, is thought to be under pressure, with many analysts believing it needs to be cut.
The bank said yesterday that the finance director role taken on by Mr Hampton when he joined the company was no longer relevant, because the group is now focused on organic growth.
"There has been a change in strategic direction since Philip Hampton joined the group, resulting in a focus on organic growth. This has meant a move away from the merger and acquisition activity that was the focus at the time of his appointment," the company said.
Mr Hampton joined the company in June 2002 and has since helped orchestrate about $5bn of asset sales. This includes extricating Lloyds from the debt markets of emerging countries such as Brazil, which were creating substantial bad loan charges for the bank.Reuse content