Rewarding failure at C&W Worldwide

Posted by Neil Hume on Jun 28 16:10.

More on Tuesday’s profit warning from Cable & Wireless Worldwide.

Analysts reckon there are serious corporate governance issues with the decision to promote John ‘The Bouns’ Pluthero to executive chairman. They are nicely summed by Morgan Stanley’s Nick Delfas:

The appointment of the CWW divisional CEO as Executive Chairman and then Chairman of the new de-merged company (with no reduction in salary, in fact a total remuneration above that of the Vodafone Chairman), and now CEO again raises serious governance concerns in our view, as does the simultaneous elevation of the Senior Independent Director to Chairman.

The CEO appointment was made without a search for alternatives, which again raises governance concerns and we think may be questioned by shareholders. This is particularly the case because the combined CWW and CWC share price is 83p, versus around 100p when John Pluthero arrived from Energis in 2006. In the intervening period management has been paid a total of more than £35m, most of it in what is now CWW, and well above the actual cash generation of the division / company. Throughout this period the new CEO has been heavily involved in the business, judging from company statements and the level of remuneration.

Shocking.

Just shocking.

Via Bloomberg, the biggest shareholders in CWW.

Related links:
The Cable & Wireless boardroom bust-up – FT Alphaville
Pluthero takes helm at C&W Worldwide – FT

This entry was posted by Neil Hume on Tuesday, June 28th, 2011 at 16:10 and is filed under Capital markets, M&A, People. Tagged with , , .

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