Marconi ignores Cadbury code to make Lord Simpson the chairman

Click to follow
The Independent Online

Lord Simpson is to retire as chief executive of the electronics group Marconi next year, handing over the reins to the company's finance director John Mayo.

Lord Simpson is to retire as chief executive of the electronics group Marconi next year, handing over the reins to the company's finance director John Mayo.

In a departure from best corporate governance practice, Lord Simpson will succeed Sir Roger Hurn as Marconi's non-executive chairman. The Cadbury code recommends that a chief executive of a public company should not be made its chairman.

Lord Simpson joined GEC, as the company was then known, in September 1996 on a controversial five-year contract which will earn him £10m. He will retire as chief executive in July next year at Marconi's annual shareholders' meeting.

Mr Mayo, a former finance director of the pharmaceuticals group Zeneca and one-time investment banker with SG Warburg, joined Marconi a year after Lord Simpson.

The two men are the architects of the company's transformation from a defence, electronics and industrial group to one focused largely on telecommunications and the internet. Last year, Marconi sold its defence electronics arm, Marconi Electronics Systems, to BAe Systems for £7bn and paid $7bn to acquire two high-technology US telecoms equipment suppliers, Reltec and Fore Systems.

A Marconi spokesman defended the decision to appoint Lord Simpson as chairman, saying: "No one could accuse George Simpson of not being his own man. He will make a very strong non-executive chairman."

There had been speculation that Mr Mayo might quit for a chief executive's position elsewhere. A spokesman said the terms of his new contract and pay had yet to be agreed.

Comments