Pearson surprises the City with news of Scardino’s departure from top job

By DOMINIC JEFF
Published on 04/10/2012 00:00

Pearson chief executive Dame Marjorie Scardino is to step down after 16 years, potentially clearing the way for the educational and media group to sell the Financial Times newspaper.

In a move that caught markets by surprise, Pearson said yesterday that the head of its education division, John Fallon, will replace 65-year-old Scardino in January. Scardino was the first female chief executive of a FTSE 100 company and is credited with refocusing and expanding the business.

Chairman Glen Moreno said: “Under Marjorie’s leadership, Pearson has fundamentally shifted its business portfolio towards all kinds of learning, its geographic exposure towards fast-growing economies and its product mix towards digital and services. It has been a radical and highly successful transformation.”

During her tenure, sales tripled to nearly £6 billion and profits grew more than three times to a record high of £942 million in 2011.

However, she was strongly opposed to a sale of the FT, which some investors view as desirable because it would further distance Pearson from volatile advertising revenues and could fetch a high price because of its prestige. Fallon is thought to be less attached to the newspaper.

Steve Liechti, an analyst at Investec, said Fallon’s appointment could be negative if other well-regarded executives decided to leave after being passed over.

But he said that the potential FT sale would be seen as a positive by the market, as it could raise about £750m which would likely be paid out to shareholders.