TSB shareholders pushed for chief's resignation

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The Independent Online
DON McCRICKARD, the former chief executive of TSB Group who suddenly resigned earlier this week, left after pressure from a number of the banking group's shareholders, according to a leading institution.

Shareholders are said to have pushed for Mr McCrickard's resignation after the plunge into loss in 1991 and because of heavy bad debts at Hill Samuel, the merchant banking subsidiary of the TSB Group.

'Eventually enough lobbying went through to Goodison that he had to go,' a source at an institutional shareholder said. But Sir Nicholas Goodison, chairman, said last night: 'No institutional group or anyone else has put any pressure on me on this issue.' He restated that Mr McCrickard had left because he had finished his specific task of turning TSB from a broadly based financial services group into a business focused on banking and insurance.

However, shareholders are said to have expressed their views directly to Sir Nicholas over a period of months.

Mr McCrickard, who is expected to receive a pounds 750,000 pay-off, has presided over the group for two years, in which time its fortunes have dwindled. In 1989 the group made a pre-tax profit of pounds 155m, but in 1991 it reported a loss of pounds 47m.

Hill Samuel, the merchant bank, is largely blamed for the reversal in fortunes. It reported a pre-tax loss of pounds 419m in 1991.

Peter Ellwood, formerly chief executive of the retail banking and insurance arm, is the new group chief executive. His business has contributed profits that have offset losses in other parts of the group.

Mr McCrickard, 55, was earning pounds 245,000 a year and was not due to retire until he reached 60.

Sir Nicholas said earlier this week that he had discussed the matter of Mr McCrickard's resignation during the past six to eight months. The formal resignation and departure on Monday after a board meeting was the seal on a lengthy process, Sir Nicholas claimed in briefings aimed at countering suggestions that a renewed upheaval is under way at TSB.

A shareholder said that the unseating of Mr McCrickard was an example of institutional shareholders becoming increasingly pro-active. They have forced the resignations of a number of senior British executives during recent years, including that of John Hardman, chairman and chief executive of Asda until June last year.

'The institutions have learnt over the years that rather than vote with your feet and sell the shares, if you think there is value in the company it is better to look at the management and change the management . . .

'If someone is going to pay themselves pounds 250,000 or pounds 500,000 a year, then if company results are not up to scratch you are out,' a shareholder said.

Mr McCrickard joined TSB in 1983 from American Express and became group chief executive in January 1990. Mr Ellwood joined from Barclays in 1989.