Shock as Prudential removes chief executive

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The Independent Online

Insurance giant Prudential shocked the City today by announcing it had removed its chief executive of the last five years.

Insurance giant Prudential shocked the City today by announcing it had removed its chief executive of the last five years.

Jonathan Bloomer, who will be replaced by HBOS finance director Mark Tucker, had been under pressure from shareholders following his surprise decision last year to raise £1 billion towards driving UK growth.

The Pru said its decision reflected "long-term succession" issues and was not related to the rights issue or because of pressure from investors.

Mr Bloomer said he was "extremely disappointed" to be leaving the post he has held since March 2000, but has agreed to stay with the company until May 6.

Investors welcomed his departure, with Pru shares rising more than 4% today, although the timing surprised many as Mr Bloomer looked to have weathered the criticism that followed the shock £1 billion rights issue last year.

His position was also considered to be more secure after the Pru delivered a strong set of annual results earlier this month, with UK sales set to rise by 10% this year - against industry expectations of about 5% growth.

Chairman Sir David Clementi accepted that Mr Bloomer was still unpopular with a number of shareholders and said that moves to find a successor began at the turn of the year.

He said: "A lot of the pressure at the time of the rights issue to make a change at chief executive level has died down, although it's not completely gone away.

"There was no clamour for it and shareholders said they would leave it to the board to decide."

In addition to the rights issue, investors are thought to still be angry at a 40% cut in the Pru's annual dividend in 2003 despite a commitment to a progressive dividend policy.

Mr Bloomer also saw his standing weakened by a failed bid for American General in 2002, while a buyer could not be found for the Pru's remaining 79% stake in its Egg internet banking business last year.

Although final details of his compensation package are still to be worked out, it is expected that Mr Bloomer will receive a pay-off of more than £1 million.

Mr Tucker, 47, worked for Prudential for 17 years until he took up his post at banking group HBOS in 2003. During that time he masterminded the expansion of the insurer in Asia.

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