Whitehead Mann chief axed after profits warning

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The Independent Online

Whitehead Mann sacked its chief executive Stephen Lawrence yesterday - one week after a shock profits warning that caused the headhunting group's shares to collapse.

Whitehead Mann sacked its chief executive Stephen Lawrence yesterday - one week after a shock profits warning that caused the headhunting group's shares to collapse.

Mr Lawrence's future had looked increasingly in doubt after the announcement that its expansion into the US had failed. He has left immediately, and negotiations on his pay-off are continuing. He was employed on a 12-month contract, which could entitle him to a pay-out of more than £600,000.

Mr Lawrence, who joined Whitehead Mann in 2002 from Datatec, the South African IT company, will not be directly replaced. Instead, Sir Colin Southgate, the former Thorn EMI chairman who is non-executive chairman of the group, will take over as head of the executive committee, which sits underneath the PLC board and is responsible for the day-to-day running of the business. Chris Merry, the finance director, will take on the additional responsibilities of managing director.

As part of the boardroom reshuffle, Carol Leonard and Jonathan Baines have also been promoted to the company's main board. Ms Leonard joined Whitehead Mann this year after the acquisition of her business, Leonard Hull International. Mr Baines is another senior headhunter who joined in 2001 after the acquisition of Baines Gwinner.

Whitehead shares rose 5p to 132.5p yesterday, having collapsed 35 per cent last week on news its US ambitions were in tatters. It set up operations there in 2000, but has struggled to create a presence in the country and a number of its top consultants left last month. The group will now look for strategic alliances with US practices rather than carry on with a stand-alone business.

The warning that revenues would be hit by about 12 per cent for the year took shareholders by surprise, as the City had recently been told that trading conditions were sound. Whitehead Mann specialises in boardroom-level appointments and its reputation in the City had been infallible. But questions have been raised over the performance of the company since Anna Mann, founder of the company, left this year.

In recent months, it has been at the centre of a number of high-profile recruitment mishaps. It put forward Sir Ian Prosser, the former chairman of Bass, as the new chairman of Sainsbury, but his appointment caused uproar in the City and he had to withdraw before taking up the job. Its choice of Philip Yea as chief executive for British Land also led to embarrassment. He ditched the company at the last minute in favour of the venture capital outfit, 3i.

Analysts suspected that the decision to axe Mr Lawrence may have been to keep other top consultants from leaving the business. Hector Forsythe, an analyst at Evolution Beeson Gregory, said: "There were concerns that some of the issues ... it has experienced in the US could spread to the core UK business."

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