ITV investors furious over 'shambolic' hunt for CEO
Anger over collapse of talks with preferred candidate
Tuesday 29 September 2009
ITV shareholders have reacted in anger to the collapse of its search for a new chief executive, called the situation a "total shambles".
One of ITV's largest shareholders was furious after the company terminated talks with the preferred candidate Tony Ball on Friday. The fund manager said: "It is an extraordinary display of incompetence by a fully listed company in the modern era; especially one that has not been noted for the success of its recent commercial judgement." He added: "The situation is a total shambles, the process has not been handled at all well."
The shares have fallen almost two-thirds since May 2007, and the manager said: "Investors should be allowed to be put out of their misery by BSkyB or some other suitable entity." BSkyB, which holds almost 18 per cent of ITV, would not comment on the situation.
Insiders at ITV hit back, saying the issues arose from Mr Ball's side. "The company found it very difficult to run the process, when every step of the way was played out in the media by one of the candidates. ITV did everything to keep the process quiet," one said.
Euan Stirling, a fund manager at Standard Life, which has a small shareholding in ITV, called the situation "a bit of a mess" blaming the company's decision to appoint Michael Grade as executive chairman, a role that combined a traditional chairman with chief executive. "It highlights the importance of board structure. ITV went into this with a combined role of chief executive and chairman and the mess that they are in at the moment just highlights the danger of that," he said.
Mr Stirling said: "When you have so much power concentrated with one individual, when that individual decides to go it does leave a bit of a vacuum at the top. It emphasises how important it is to have independent and strong characters in the roles of chief executive and chairman. It's important for two strong characters to be foils for each other."
The source close to ITV added that the process had been run by the nominations committee and not Mr Grade. "ITV will do its best to keep the process to find a new chairman and chief executive completely private."
The broadcaster pulled out of talks with Mr Ball, a former chief executive of BSkyB, on Friday after he asked for a pay packet worth £42m over five years, while the company was only prepared to go to £25m. The deal-breaker is understood to have come with Mr Ball's demand to have a veto over the company's choice of chairman to replace Mr Grade when he leaves later this year.
Names linked with the chairman's job include Sir Crispin Davis, the former chief executive of Reed Elsevier, Sir Michael Bishop, who set up BMI, Sir Christopher Gent, chairman of GlaxoSmithkline and Sir Christopher Bland, former chairman of BT.
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