Spirent shares on rise as boss paid $1.5m leaves
Spirent Communications's chief executive Bill Burns had a bad day yesterday: he lost his job at the helm of the testing company and saw its shares rise 5 per cent.
The technology company, which tests 3G and 4G networks plus companies' software, gave no reason for Mr Burns' departure, which comes after five years in the job.
Spirent reported a 72 per cent fall in first-half profit last month, due to lower orders and a weak performance at its network and applications unit.
Spirent said Mr Burns "will step down from the board and leave the company with immediate effect," adding that he will "receive payment in accordance with his contractual arrangements". Spirent's annual report suggests Mr Burns is entitled to a year's salary, or $720,000 (£464,000) plus health insurance benefits for 12 months.
Last year, Mr Burns took home a pay package worth $1.5m. Spirent said finance director Eric Hutchinson will become interim boss. "The board, with a view to the long term, will in due course retain consultants to undertake an extensive search for a new chief executive officer," Spirent added.
George O'Connor, at Panmure Gordon said: "Some will see the news as a portent of a poor order build for the third quarter; however, in our view it is more likely a degree of frustration at the pace of change, and possibly failure to use the balance sheet more aggressively to hold the share price."
He pointed out that comments from the FTSE 250 company's rivals, namely Ixia and Anite, suggest that Spirent's operational weakness is primarily market driven rather than a specific fault with the business.
Mr O'Connor suggested Sue Swenson, currently a non-executive board member at Spirent, could be the next chief executive. "Sue is best known for 'fixing' Sage US, and has a very strong telecoms pedigree – she can either pick the candidate or, even better, do the job herself – Go Sue!" the analyst said, adding that in the meantime "Mr Hutchinson, appointed January 2000, is a very safe pair of hands, who knows the company inside and outside and should do a good job." Spirent's shares rose 6p to 134.6p.
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