Pearson reshuffle sets succession fight scene

Click to follow
The Independent Online
Pearson, the media group which owns the Financial Times, announced a boardroom re-shuffle yesterday which paves the way for a three-way battle for the top job when the chief executive, Frank Barlow, retires.

The changes were announced together with a gloomy trading statement which knocked almost 10 per cent off Pearson shares. The company warned that this year's profits will be hit by heavier-than-expected restructuring charges and significant job losses. Analysts downgraded profits forecasts as the shares fell 49p to 667p.

Pearson has addressed the succession question by saying that Mr Barlow will continue as chief executive until the annual meeting in May 1997. A successor will be announced then, the company said.

As the company is thought to favour an internal candidate, that puts three men in contention. One is John Makinson, managing director of the Financial Times, named yesterday as the group's new finance director. He will replace James Joll next April. Mr Joll, who is 59, will leave the board at the end of 1996.

Another candidate is Greg Dyke, the head of Pearson TV, who will be promoted to the main board in March. It is the first time Pearson has granted a boardroom seat to one of its divisional chiefs. David Bell, who is chief executive of the Financial Times group, will also join the board in March and is a possible heir-apparent.

The changes were welcomed in the City, which has been looking for fresh blood on the Pearson board. Pearson said yesterday that its re-organisation costs would cost around pounds 45m instead of the pounds 12m previously expected. The company has already made significant redundancies at Westminster Press and at the Financial Times, where the Isle of Dogs printing plant was closed.

It is now spending a further pounds 32m cutting backroom office costs, which will require further redundancies.