Dissidents force out Maurice Saatchi

Lady Thatcher's favourite ad-man, Maurice Saatchi has stepped down as chairman of Saatchi & Saatchi, parent company of the advertising agency he and his brother Charles founded almost a quarter of a century ago His departure was announced last night after a board meeting convened at the insistence of dissident shareholders who claimed the support of more than 40 per cent of the shares and who threatened to call an extraordinary general meeting if the board failed to force him out.

He is considering an offer to become joint president of the company with his brother Charles, and chairman of Saatchi & Saatchi Worldwide, one of the operating agencies. Jeremy Sinclair, currently deputy chairman, will become acting chairman pending the appointment of a successor.

The company will also change its name, dropping Saatchi from the holding company, another demand put to the board by the dissidents, led by David Herro, of Harris Associates, the Chicago-based fund manager It is the end of an era for a business synonymous both with Seventies style and Eighties materialism, and closely tied to the fortunes of its best-known client, the Conservative Party.

Maurice founded the company with his elder brother Charles in 1970 at a time when the advertising industry was largely American-owned and imitated American styles and taste. The Saatchi style was new, wittier and more intelligent, and instantly successful.

By 1975 the company was ready to go public, with profits of just £2m. But it was the celebrated poster campaign "Labour Isn't Working", featuring gloomy dole queues on massive billboards, which was widely credited with winning the 1979 election for Margaret Thatcher which really put Saatchis on the map.

The business grew rapidly, spawning new creative divisions and aggressively acquiring more agencies. Then the recession struck, hitting the advertising industry particularly hard and a new generation of hard-headed shareholders gained control.

The big idea, page 13