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Business News

Plutheroin surprise resignation at CWW

John Pluthero has quit as chief executive of Cable & Wireless Worldwide (CWW) in a move that surprised the markets, coming just months after he took the helm of the telecoms group.

Mr Pluthero, a controversial figure in the telecoms industry, will step down later this month and sever ties with the company in March. He has waived his severance payment.

The CWW chairman stepped in as chief executive in June after Jim Marsh resigned in the wake of a string of profit warnings. The share price had more than halved since the company demerged from Cable & Wireless in 2010.

The company announced that former Vodafone UK chief executive Gavin Darby will take over as chief executive on 28 November, with a package potentially worth £2.1m.

Insiders said Mr Pluthero was the natural choice to oversee the group after Mr Marsh's departure. He scrutinised the business and told the board it would need a "three- to five-year plan" to turn the company around.

It is understood he was not prepared to oversee such a drawn-out restructuring process and the board called in headhunters Korn/Ferry to search for a new chief executive.

Morten Singleton, an analyst at Investec, said: "Pluthero, rightly or wrongly, has been a bone of contention among actual and potential investors, having presided over years of decline in various senior capacities... in our view his departure is likely to be viewed positively by the market."

Mr Pluthero angered investors after banking £10.2m from a controversial long-term incentive plan at the old C&W, despite some feeling he had presided over a less than stellar performance.

Mr Darby was most recently UK chief executive of Vodafone, where he worked for a decade, and before that spent 15 years at Coca-Cola. He said he was keen to drive "the next phase of development" of the business.

CWW's chairman John Barton said the appointment would provide "the longevity of leadership, energy and fresh insight needed by Cable & Wireless Worldwide for the future".

The change of management was announced as the group posted half-year losses of £590m. It revealed in its results statement that it had been hit with exceptional items totalling £624m. This included a £436m goodwill impairment against previous acquisitions and a £146m writedown on deferred tax assets. Mr Singleton said: "The company is clearing the decks as befitting a change of management."

This year, CWW managers' pay was again the focus of investor anger, as 40 per cent of voters withheld or opposed the management incentive plan.

At the time Mr Barton admitted it had been a tough year for investors. "Since floating the company our share price has halved, our CFO and CEO have resigned, our reputation in the City has been damaged and we have become the whipping boy of the financial press," he said.

Shares in the group fell 7.89p to 22.31p.