The wealth management group St James's Place yesterday shocked the market by announcing the immediate departure of its chief executive Mark Lund, sending the company's shares down almost 5 per cent during afternoon trading.
His departure is all the more surprising as it follows one of the company's strongest years, with the group's share price increasing by some 60 per cent - compared to an average rise of just 16 per cent across the rest of the sector.
Mark Wilson, the chairman, insisted yesterday that Mr Lund's departure had been agreed on amicable terms. "I can categorically assure you that there's been no row, and no disagreement on strategy," he said. "Both parties agreed that it was the right time for him to step down as chief executive."
He refused to elaborate on the reasons for the resignation of Mr Lund, who joined St James's Place as deputy chief executive in January 2004, taking over the top job nine months later. During his time at the company, its share price has almost trebled.
Mr Wilson brushed aside yesterday's fall in the share price, claiming it was "minuscule" compared to its enormous growth over the past 12 months. "[The news] certainly surprised the market, and in a way I'd be disappointed if it didn't," he said. "On the other hand ... any change in a company should happen when the business is in good shape, and not when things are going badly."
The search for a new chief executive begins this month. However, Mr Wilson said the board was in no hurry to find a replacement, saying that there was a strong management team in place. He added that the search would not be restricted to the financial services arena.
Analysts were relaxed about Mr Lund's departure, pointing out that the key to St James's success was its large distribution network, which was unlikely to be disrupted by a change. Eamonn Flanagan, of Shore Capital, said: "We believe the chief exec's decision to resign was probably taken on a mutual basis and is not indicative of problems within the business."
As well as announcing Mr Lund's resignation, the company said trading for the final quarter of the year had been in line with expectations. Shares in the group ended the day down 4 per cent at 429p.Reuse content