Thiam faces calls to quit from angry investors
Sunday 06 June 2010
The Prudential's chief executive, Tidjane Thiam, is expected to face a barrage of questions from angry investors at the insurer's general meeting in London, tomorrow, amid growing disquiet at the board's handling of the botched deal to buy AIG's Asian insurance arm for $35.5bn (£24bn).
Though institutional investors have pulled back from formally tabling a resolution of no confidence in Mr Thiam and his chairman, Harvey McGrath, furious private shareholders are expected to add to the pressure on the pair to quit.
So far, the two have resolutely refused to bow to pressure to resign following the collapse of the firm's failed attempt to purchase AIA.
But there is a widespread opinion within parts of Prudential that the pair should resign within the next few months, or cause further harm to the company's image.
One insider said: "They've done nothing right throughout this deal, but quitting would be a start."
Mr Thiam and Mr McGrath are also facing a backlash from angry banks that signed up to help underwrite the firm's $20bn rights issue needed to fund the deal, but received nothing as the purchase failed.
One banker said: "The lead banks pocket tens of millions and we get sweet FA. This is a royal mess."
Despite avoiding the public spotlight, institutional investors are continuing to work in the background to secure an orderly succession to Mr Thiam, with two top-20 investors saying he should quit.
One said: "Tidjane and Harvey think that by linking arms and blaming market conditions, they can somehow survive. Nobody wants them to go straight away, but there is an inevitability they will have to go in the medium term."
Another added: "Collectively, as shareholders, we have brought this deal down and we now need to follow it through, boot these two out and get some value out of this stock."
A host of potential candidates to replace Mr Thiam have been touted recently, including Mike McLintock, who runs Prudential's asset management business M&G. But he is thought not to want the job.
"McLintock takes home more than £4m a year – why would he want to take the strain of the top job for less cash," said a source familiar with the situation. "I'd stick my money on someone like Andy Haste, who has a strong following among investors for his work at RSA."
Mr Haste has been credited with turning around RSA, the general insurer, which was in dire straits on his arrival. And last year, he was tipped for a top job at Zurich, the European insurance giant. Meanwhile, Prudential's forced abandonment of the AIA deal has focused investors' minds on the company's break-up.
Resolution, the insurance firm led by Clive Cowdery, has been cited as a likely bidder for the UK business. A source said the firm has funding from banks that would enable it to pursue such a deal if the business is sold off. Analysts estimate the business is worth around £5bn.
Belle Knox: How the porn star student from Duke University became bigger than Justin Bieber
Top 10 most expensive cities in the world: Singapore named costliest place to live – but what about London?
Oscar Pistorius trial: Neighbour feared athlete would use gun that killed his girlfriend Reeva Steenkamp to shoot himself
Oscar Pistorius trial: Athlete 'cheated on me' with Reeva Steenkamp, former girlfriend Samantha Taylor tells Pretoria court
Channel 4 announces two-hour TV show to be broadcast 'Live from Space' later this month
Apple's Tim Cook: Business isn’t just about making profit
Thousands of young people forced to go without food after benefits wrongly stopped under 'draconian' new sanctions regime
Ukraine crisis: New navy chief 'defects' and surrenders Crimean HQ as Putin claims ultranationalists forced intervention
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Ukraine crisis: Russia dismisses '3am ultimatum' as 'total nonsense'
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
- 1 The future of sex: The first female condoms were derided, mistrusted and shunned - but will their modern counterparts catch on?
- 2 South African rhino finally put down after roaming Kruger park for days with horn hacked off and bullet in brain
- 3 Channel 4 announces two-hour TV show to be broadcast 'Live from Space' later this month
- 4 Man stabbed with Legend of Zelda Master Sword in serious condition
- 5 Study suggests that 'gaydars' are real - at least for women
iJobs Money & Business
£12000 per annum: Inspiring Interns: The company works with Tier 1 FTSE 100 Ba...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...