Invensys surprised the market by announcing the departure of its chief executive, Ulf Henriksson, yesterday. News of the shake-up sent the FTSE 100 engineering group's shares down by more than 8 per cent at one point.
Mr Henriksson triggered a sudden jump in the Invensys share price last year when he speculated that its partner China Southern Rail Company could mount a takeover at the right price. The spike, which sent the shares up by around 9 per cent on the first day of trading after the comments came to light, forced the company to issue a statement denying that it was in talks regarding a possible offer or "about a strategic partner taking a minority stake".
Yesterday, the engineering group, which also said it still expected full-year results to be in line with market hopes, named its finance director, Wayne Edmunds, as Mr Henriksson's replacement with immediate effect. David Thomas will serve as the acting finance director until Invensys makes a permanent appointment.
Mr Henriksson's contract stipulates a 12-month notice period, meaning that he is entitled to the £820,00 basic salary he earned in the year to March last year, while pensions and any additional payments are subject to negotiation.
Mr Edmunds's basic salary has been bumped up to £650,000 from £425,000 as a result of the promotion, the company said.
At the close, Invensys shares were 4.5 per cent, or 16.1p, lower at 341.2p, ending as the weakest of the blue chips.