Pru chair to resign after AIA debacle

Harvey McGrath, chairman of Prudential, is to step down next year after bearing the brunt of shareholder criticism over the group’s costly failed bid for Asian rival AIA.

More than a fifth of shareholders voted against re-appointing McGrath at the insurer’s investor meeting in May in protest over the botched AIA deal, which left the company to pick up £377 million in costs and fees.

The unusually large dissent showed McGrath had become the focus of resentment over the AIA debacle rather than chief executive Tidjane Thiam, who was initially seen as equally culpable.

McGrath, who needed a simple majority of votes to keep his job, said at the time he had no intention of stepping down.

In a statement yesterday to the stock exchange, McGrath, 59, said: “I feel the time is coming when my other commitments deserve more of my time.”

He will leave in 2012 once a successor has been found, the Pru said. It has been speculated he could be replaced by Howard Davies, a former chairman of the Financial Services Authority who joined the insurer as a non-executive director last year.