This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/business/2014/nov/26/thomas-cook-chief-harriet-green-shock-departure

The article has changed 7 times. There is an RSS feed of changes available.

Version 5 Version 6
Thomas Cook shares crash after Harriet Green is pushed out Thomas Cook shares crash after Harriet Green is pushed out
(about 7 hours later)
Harriet Green has been pushed out as chief executive of Thomas Cook ahead of schedule, in a move that stunned the City when announced on Wednesday morning. Harriet Green has been pushed out as chief executive of Thomas Cook in a shock departure that wiped £400m off the value of the tour operator.
The news of Green’s departure caused the tour operator’s market value to slump by £400m. Only five days ago Green, who had been tasked with turning around the company’s fortunes, had told an “Inspiring Women” conference: “You can’t do a transformation on this sort of scale in a year or two years. I usually say it’s about six years ... we’re absolutely not done.” Green had garnered investor plaudits, and an award for businesswoman of the year, for turning around a business that was recovering from the brink of bankruptcy when she joined two years ago. But her board was less enamoured. As Green departed with shares worth more than £9m, Thomas Cook’s chairman said the group needed a leader with more knowledge of the leisure industry.
Green has left with immediate effect with Peter Fankhauser, the chief operating officer, taking over. Fankhauser, who has worked at Thomas Cook for 13 years, survived Green’s management cull and was promoted to operations chief a year ago. Thomas Cook’s chairman, Frank Meysman, said Green had left because the company needed someone with more travel industry experience. He added that she would be paid her six months’ notice, and that the board had been unanimous that it was the right time for her to hand over to Fankhauser. The surprise ousting came after Green told the Daily Telegraph in May: “I’ve always said that I’m going to stay six years”. Five days ago, Green told an Inspiring Women conference: “You can’t do a transformation on this sort of scale in a year or two years. I usually say it’s about six years ... we’re absolutely not done.”
One company insider said: “Is she going maybe a year earlier than she wanted? Probably.” However, Green has left with immediate effect and Peter Fankhauser, the chief operating officer and a company veteran, is taking over.
Another insider confirmed that Green’s exit was premature: “What was in everyone’s mind was that Peter would take over. The question was when. What has been agreed most recently is when.” Spokespeople for Green and for the company stuck doggedly to the party line that the departure had been agreed by both sides. However, one company insider admitted: “Is she going maybe a year earlier than she wanted? Probably ... If your management style is shaking people by the throat, there is only so long that people can put up with that.”
The company was keen to stress that Green had done a “phenomenal” job, having been credited with bringing the tour operator back from the brink of bankruptcy but that the group now needed a leader with expertise in the sector. Another company insider confirmed that Green’s exit was earlier than she had originally hoped for: “What was in everyone’s mind was that Peter would take over. The question was when. What has been agreed most recently is when.”
Thomas Cook shares plunged 22% to 107p on the news, plunging its market value down from more than £2bn to £1.56bn. The group also warned that trading had become more difficult and growth would be slower in the current financial year. Business in Germany has weakened as consumer confidence has dropped in Europe’s biggest economy and the UK winter programme failed to fill increased capacity. Fankhauser, who has worked at Thomas Cook for 13 years, survived the management cull implemented by Green when she joined from electronic components distributor Premier Farnell.
Thomas Cook’s chairman, Frank Meysman, said the board had been unanimous that it was the right time for Green to hand over to Fankhauser as the company needed a leader with more travel industry experience. He added that she would be paid her six months’ notice and be allowed to keep 8m shares, worth about £9.2m, that were originally due to vest in 2015 and 2016 as part of her performance share plan.
The company was keen to stress that Green had done a “phenomenal” job. She is widely credited with rebuilding the tour operator after its near collapse – taking the company’s stock market value from £148m to just under £2bn before Wednesday’s news. She was paid £2.86m in 2013, including £680,000 salary and a bonus of £1.79m.
Thomas Cook shares plunged 22% to 107p as the group announced Green’s departure and warned that trading had become more difficult and growth would be slower in the current financial year. Business in Germany has weakened as consumer confidence has dropped in Europe’s biggest economy and the UK winter programme has failed to fill increased capacity.
Meysman said: “It’s a different balance of requirements that is needed going forward. Knowledge of the market and implementation of the strategy that Harriet has set out is more important than continuous strategy. She loved this job tremendously but she has always been very realistic that this job will end at some point in time.”Meysman said: “It’s a different balance of requirements that is needed going forward. Knowledge of the market and implementation of the strategy that Harriet has set out is more important than continuous strategy. She loved this job tremendously but she has always been very realistic that this job will end at some point in time.”
Green was paid £2.86m in 2013, including £680,000 salary and a bonus of £1.79m. Meysman said she would be paid six months’ notice, according to her contract, and her performance-based share awards. “She will make a substantial amount of money if the shares continue to go up and she will deserve a substantial amount of money,” he said. However, the notion that Fankhauser had always been groomed to take over appeared to be undermined by one major Thomas Cook shareholder, which issued a statement saying it had yet to even meet the new boss.
Chris Beauchamp, market analyst at IG, said: “Investors will be right to ask questions over how her departure will affect the turnaround plan, so expect much of the price reaction today to be in connection to this.” Simon Skinner, European equity analyst at Thomas Cook shareholder Orbis Investments, which has a stake of about 3.5%, said: “Harriet did a great job. As long-term investors, we’re always on the lookout for great managers and we’ll certainly be keeping an eye on where she goes next. In the meantime, we’re looking forward to meeting Peter and seeing him settle into his new leadership role”. The investor said it had been informed of the change in chief executive “in line with the rest of the market”.
Beauchamp added that the warning on more moderate growth this year “is a sign that the easy bit has been done”. Green, known for her minimal sleep, high-intensity workouts in the gym at 5am and a robust management style, was one of the few female chief executives of a leading UK public company. She said in a statement: “I always said that I would move on to another company with fresh challenges once my work was complete. That time is now. I wish all of the team at this re-energised company continued success, as they move to the next phase of the company’s development.”
Green, known for minimal sleep and high-intensity workouts in the gym at 5am, joined the travel firm from Premier Farnell, the electrical products company, when Thomas Cook’s market value was £148m. She slashed 2,500 jobs, cut debt, brought in new managers, revamped holiday packages, and increased internet sales. She was named Veuve Clicquot businesswoman of the year in May.
One of the few female chief executives of a leading UK public company, Green said in a statement: “I always said that I would move on to another company with fresh challenges once my work was complete. That time is now. I wish all of the team at this re-energised company continued success, as they move to the next phase of the company’s development.”
Her departure was announced as Thomas Cook posted an annual pretax loss of £114m, down from £163m a year earlier. Earnings before interest and tax rose 44% to £323m.