Pearson succession draws fire from City analysts
Friday 18 October 1996
The appointment as deputy chairman of Dennis Stevenson, the man credited with saving aircraft leasing company GPA from financial collapse, was viewed as a positive step. Mr Stevenson will take over as chairman in the spring, when Michael Blakenham, the last of the Cowdray family to take an executive role at Pearson, steps down. Mr Stevenson is also expected to resign from his high-profile role as chairman of the trustees of the Tate Gallery.
But analysts questioned the appointment of Marjorie Scardino, the little- known chief executive of the Economist, who takes over from Frank Barlow, the managing director, at the end of the year, becoming the first chief executive of a FTSE 100 company.
"So Pearson now has a journalist for a chief executive, a journalist [John Makinson] for a finance director and a management consultant as chairman," said one leading analyst who has been critical of Pearson in the past. "I rest my case."
"We haven't heard of her, and we wonder whether she can be up to the job, given her background," added another analyst.
"This is certainly disappointing because [Ms Scardino] is not a big hitter," Louise Barton, analyst at Henderson Crosthwaite, said. "Running the Economist is far different from running a major PLC."
There was also concern that the appointment came from within Pearson's empire. "They should have gone for a true outsider," complained one analyst.
But Pearson senior executives dismissed the criticisms. "The City always reacts this way," Mr Barlow said. "But the City also always gives new chief executives some room and some time."
He added: "When they get to know her, they will see how capable she is."
The appointments, which were decided last month but delayed by contractual negotiations, mark the end of a series of management changes aimed at preparing for the retirement of Lord Blakenham and Mr Barlow. Between them, they oversaw the transformation of Pearson from a collection of luxury companies such as fine china, oil exploration, financial services and publishing into an integrated media giant, worth nearly pounds 4bn at yesterday's market price.
All the same, the company has been a takeover target in recent months, following a disastrous foray into the CD-Rom and games cartridge market in the US and persistent criticisms in the City that the company continued to lack focus.
Ms Scardino, an American-born lawyer and one-time newspaper publisher, is credited with growing the Economist businesses, particularly in the US. She said she would spend the next few months "looking closely at Pearson and at the opportunities".
She added that she and Mr Stevenson had "no strategic prejudices, and will start with a clean slate". Neither executive would discuss strategy in detail, but it is believed the board of Pearson has not ruled out dramatic changes, which could include the sale of some key assets, or perhaps the spinning off to shareholders of the television subsidiary.
All the same, Ms Scardino said: "We will do what we think is right. If it popular to do something we won't just do it if we think it is wrong. We will stand our ground."
Scardino at the top, page 3 Comment, page 23
- 1 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 2 Doctors remove 80 teeth from boy's jaw
- 3 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 4 Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations
- 5 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
Germany and ECB set for fight over money-printing
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
Syrian teenager Usaid Barho reveals how he escaped from Isis using a suicide vest
Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
Millions of Britons struggling to feed themselves and facing malnourishment
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Immigrants make UK racist, says Ukip councillor Trevor Shonk
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...