ScottishPower ousted its long-serving chief executive Ian Russell yesterday, seven weeks after the board gave him its public backing, and brought in Philip Bowman, the former head of the Allied Domecq drinks empire, as his replacement.
Mr Russell, whose position had been under threat for some time after ScottishPower's disastrous foray into the US electricity market, will walk away with a pay-off worth about £5m and a £4m pension pot.
His departure sent ScottishPower shares 3 per cent higher on hopes it might pave the way for a renewed offer for the company from the German utility group E.ON, which pulled out of bid talks in November.
Despite Mr Bowman's reputation as a deal maker for selling Allied Domecq to Pernod Ricard of France for £7.4bn last year, sources close to the new chief executive played down suggestions that he had been brought in to find a buyer for ScottishPower.
Mr Russell's fate appeared to have been sealed last May when ScottishPower announced it would take a £1bn loss on the sale of its troubled US subsidiary PacifiCorp to the legendary investor Warren Buffett. The sell-off followed an earlier ill-fated foray into water which ended with a £1bn loss on the disposal of Southern Water.
But as recently as late November, Mr Russell earned a ringing endorsement from ScottishPower's chairman Charles Miller Smith, who declared he had "absolute confidence" in his chief executive. At the time, the search for a successor was under way and Mr Bowman was approached for the job in December. Mr Miller Smith said yesterday Mr Bowman would bring "a fresh perspective to the job".
Mr Bowman is 53, the same age as Mr Russell, and this week was made a non-executive director of another stalwart of Scottish industry, the brewer Scottish & Newcastle. The Australian-born but UK-educated Mr Bowman has spent the past 20 years in the drinks industry, joining Bass in 1985 and rising to become chief executive of Bass Taverns before joining Allied Domecq as finance director in 1998.
He has two Scottish grandmothers and while at Allied became a Keeper of the Quaich, the body which celebrates the contribution of the Scotch whisky industry. A friend said: "He doesn't know a great deal about the electricity industry but he does know how to be a good chief executive. He is going there to drive the business forward."
Mr Russell's severance package will be made up of £2m in salary, bonus and benefits and a further £3m in share options and long-term incentive payments.Reuse content