Rentokil chief defends Thompson ousting
Brian McGowan, the newly installed chairman of Rentokil, was forced to defend his chief executive yesterday in the face of hostile shareholder reaction at the company's annual meeting.
Mr McGowan last week led a rebellion by the company's non-executive directors that ousted Sir Clive Thompson, the entrepreneur who built up the company, which provides support services such as pest control, washroom services and security guarding.
Mr McGowan's explanation of events appeared to satisfy no one at the AGM, which heard calls for his resignation as well as that of the chief executive James Wilde and Ian Harley, a non-executive director.
Mr McGowan was asked repeatedly why Sir Clive had to go but he stuck to his line that it was a matter of "style" rather than strategic differences.
It is understood that Sir Clive, who was not at the AGM, did not agree with the version of events spelled out by Mr McGowan, who told investors that no strategic differences had surfaced "in the boardroom".
Sir Clive believes that a January board meeting did see such a disagreement over substantial matters become apparent. He also contends that over the course of a year before last week's dramatic events, he and Mr Wilde had a difference of opinion on group strategy that was clear in many conversations between the pair, even though the matter was not raised explicitly in board meetings.
In particular, Sir Clive believed that the company should sell at least two of its business - conferencing and parcels - while he had doubts over a third, tropical plants. The money raised should either be used for acquisitions in the core areas of hygiene services and guarding or returned to shareholders, Sir Clive argued. He claims that serious differences were obvious at a board meeting in January that discussed Mr Wilde's proposed budget for the year.
At the AGM, Mr McGowan said: "There may have been differences over tactics, but not major strategic issues. Over the last three or four years there was just an increasing realisation that things were not working. Our judgement was to back the management."
Rentokil announced it would pay an increased full-year dividend, of 6.71p, despite a profits warning last week. Mr McGowan confirmed that he would spend the next three months reviewing the group's operations.
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