Standard Life joins industry shake-up

Standard Life became the fifth FTSE 100 insurer this year to shake up its management team when it announced the departure of chief executive David Nish on Friday.

Mr Nish’s six-year tenure will come to an end in August when he will be replaced by Keith Skeoch, the head of the group’s £258bn fund-management arm, Standard Life Investments (SLI).

The Edinburgh-based company’s chairman, Sir Gerry Grimstone, said it had decided to appoint Mr Skeoch without interviewing other internal or external candidates. Leading shareholders were briefed on the decision on Thursday.

He said the appointment reflected Standard Life’s transition from insurer to asset manager – from a capital-intensive business to one that generates fees. In the past two years, the group has sold its Canadian arm to Manulife for £2.2bn, and bought Newton Private Clients for £83.5m and Ignis Asset Management for £390m.

“Once we’d sold our Canadian business, it became clear that we were moving into a new era,” Sir Gerry said. “So at the end of last year, the board met to talk about the future direction of the company and we came to the amicable decision with David that it was the right time to move the management team on as well. I first started talking to Keith in February.”

The Standard Life boardroom reshuffle follows changes at Prudential, which replaced Tidjane Thiam with Mike Wells earlier this month, and Old Mutual, where Bruce Hemphill is set to succeed Julian Roberts later this year. Admiral is also to replace Henry Engelhardt with co-founder David Stevens next year, while Friends Life was sold to Aviva for £5.6bn in April amid upheaval in the sector.

Once he hands over to Mr Skeoch, Mr Nish will be on gardening leave until the end of March and will continue to collect his £835,000 base salary and benefits. Mr Skeoch will receive a lower, £700,000 base salary, although it is thought that long-term incentives could boost his overall pay to about £5.4m.

Mr Nish was appointed as chief executive in 2009. Since then, he has overseen a near doubling of its market capitalisation to £9.3bn while its overall assets under management grew from £170bn to £311.9bn. The company was also forced to navigate last year’s Scottish referendum, after it warned that a Yes vote could result in it moving its headquarters to London.

Standard Life shares slipped 0.5p to 473p.

Barrie Cornes, an analyst at Panmure Gordon, said: “While we believe that David Nish has transformed the group, successfully placing the SLI arm at the centre of the business, we view the change positively.”