The non-executive directors of InterContinental Hotels, the hotels group spun out of Six Continents last year, yesterday ousted its chief executive, saying he didn't have the "right skills" for the job.
Richard North has been chief executive of InterContinental since October 2002 and steered it through the demerger from Six Continents, the pubs and hotels business, fending off a hostile takeover approach from the entrepreneur Hugh Osmond along the way. Only last week, InterContinental announced strong interim results, reporting a 55 per cent increase in profits and plans to sell a further £1.3bn of hotel assets. This will return a further £750m to shareholders.
But David Webster, the company's chairman who is stepping in as a temporary chief executive, said the board did not want Mr North to lead the hotels business going forward. The group will be concentrating on hotel management contracts, rather than owning physical assets, and franchising its InterContinental, Crowne Plaza and Holiday Inn brands. "Richard was the right man to take the company through the de-merger, setting out the strategy for the group, and beginning the process of asset sales," he said. "But I'm looking at the future, which depends on driving global brands. We need a chief executive with a different skills base."
Although the company described his departure as by "mutual consent", Mr North was surprised by the decision, defending his record at the company and the value he has delivered to shareholders. "I would have liked to have stayed longer. This was a decision made by the non-executives, not the executives," he said.
"When I took over, this company was in desperate need of a clear strategy and good leadership and I brought both. I have also brought about a huge reduction of costs, we are about to sell 57 per cent of our hotels, nearly £1bn will be returned to shareholders and we have had great success on the trading side. The share price is up 67 per cent since we became a separate company." He will leave at the end of the month and could be in line for a pay-off of more than £1m.
Headhunters were put on standby to begin searching for a new director "some time ago", but Mr North was only told of the board's decision this week.
Many in the City accepted that Mr North did not have enough experience of brand management. "He has always been seen as a finance director with skills in restructuring," one analyst said yesterday.
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