Montgomery landed £1.3m Mecom payout
Thursday 17 March 2011
The publishing group Mecom paid its former chief executive David Montgomery €1.5m (£1.3m) after he was ousted in January from the company he founded.
Mr Montgomery, a former editor of the News of the World, revealed he had bowed to pressure after a shareholder revolt in September and left the group in January.
Yesterday the group published its full-year results for 2010, which outlined the costs of his departure and that of other executives, which totalled €5.3m. Mecom revealed it had paid €1.5m to Mr Montgomery, and a further €1.2m in "related charges" although not to the former head.
The executive chairman, Stephen Davidson, said: "Through often exceptionally difficult times, David led the group with foresight, tenacity and considerable good grace in the face of challenges on many fronts."
Mr Montgomery, a controversial figure in the media industry who was given the nickname "Rommel", decided to quit after the company's three largest shareholders – Aviva, Invesco and Legal & General – demanded his resignation.
Mr Davidson was appointed to the role of executive chairman after the group's existing chairman Alasdair Locke resigned under pressure from major shareholders following Mr Montgomery in January.
The group has called in headhunter Russell Reynolds to oversee the search for a new chief executive. Mr Davidson will become non-executive chairman when an appointment is made. There was no update yesterday beyond Mr Davidson's remark: "I look forward to introducing our new CEO in the coming months."
Mecom also revealed in its results yesterday that it paid out a further €3.8m to Joop Munsterman and Koos Boot, the chief executive and finance director of the group's Wegener business in the Netherlands, who left over the past year.
Lorna Tilbian, a senior analyst at Numis Securities, said yesterday's results were "encouraging". The group reduced non-adjusted pre-tax losses in 2010 from €146m to €73m. It also slashed net debt from €310m to 62.7m.
Mr Davidson said the results showed "the impact of 2009's successful restructuring", adding: "We have made substantial progress against the key operational and financial targets we have set ourselves. The development of our new media business is on track." The company said it would introduce its inaugural dividend payment this autumn. While digital advertising continues to grow, it could not make up the shortfall in overall advertising revenues, which fell 4 per cent to €656m. Circulation revenue improved slightly, up 1 per cent to €564m.
Yet adjusted earnings before interest, taxation, depreciation and amortisation rose 28 per cent as the group's restructuring and cost-cutting strategy paid off.
Mr Davidson said: "When I joined the board in January 2009, our agenda was dominated by the urgent need to rebuild Mecom's balance sheet and to rebase our business. This has been achieved and, following the successful restructuring, the management team has made considerable progress in evolving our new operating model."
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