Smyth, the group’s highest-paid director who received a £1.2 million pay package last year as the aviation division’s managing director, had been seen by analysts as favourite to be appointed to the role of chief executive which the company is reviving after seven years. It now looks likely to go to an external candidate. One analyst described Smyth’s departure as a “huge surprise”.
It is understood a number of key shareholders have been keen to see the CEO role reinstated both from a governance point of view and to help drive wider strategy of the group, which also operates a newspaper and magazine distribution arm.
The company announced yesterday that it was conducting a “detailed review of the group’s senior management structure” and revealed it was looking for a chief executive, a process which it is thought began some time ago.
The board said that Smyth, who is on a year’s notice period and will receive a £336,000 salary this year before any bonus payments, will “continue in his current role and fulfil all of his contractual obligations”.
Martin Brown, an analyst at Shore Capital, said Smyth’s “drive, passion and experience” had been a strong contributing factor to the successful growth of Menzies Aviation.
“The news comes as a huge surprise to us. With Menzies currently looking to appoint a CEO, our money had been on Craig to take on the role. While the search for a CEO continues, at this stage we can only see Craig’s departure as a negative for Menzies,” he said, although the broker continues to have a “buy” recommendation on the shares.
Will Shirley, of Liberum, said he believed Smyth’s decision was down to the fact he has ambitions to be CEO of a listed company.
“I don’t think there is any bitterness involved but if Menzies are looking for an external candidate for the CEO role it is not a surprise Smyth has decided to step down.”
While Shirley agreed that Smyth’s departure was a negative, he said it had been offset by the confirmation that the group was to appoint a chief executive, which shareholders would welcome. Menzies declined to comment further on yesterday’s announcements.
Chartered accountant Smyth had been appointed to the main board in 2007 and has worked for Menzies Aviation since 1994. In 2003, he moved from being the chief financial officer to head of Americas and was appointed managing director of the division in 2004.
Since 2007 it has operated with executive managing directors for both its aviation and distribution divisions, along with a group finance director.
The move to restore the role of CEO at the group had been flagged in April when the company announced that Forsyth Black had been appointed managing director of Menzies Distribution. Although Black has joined the group senior executive team, he is not a member of the plc board as his predecessor David McIntosh was. McIntosh’s departure after 25 years with the group was announced in January.
The group’s last chief executive, Patrick Macdonald, stepped down in 2007 and at the time the company said the firm’s head office would be run by the finance director, with aviation and distribution run as separate business units with their own operating boards.
The company then said the CEO role had become less crucial because of the “strong management teams” running aviation and distribution.
Shares in Menzies rose 3.5p to 659p.