BG Group chief executive Chris Finlayson today paid the price for a disastrous 16 months at the helm of the oil and gas explorer as he was ousted by the board.
Finlayson, who took over from long-serving Sir Frank Chapman at the beginning of last year, will leave with £1.3 million in notice payments and pension entitlements after the board accepted his resignation for “personal reasons” at a weekend meeting. He is understood not to have another job to go to and chairman Andrew Gould has taken over as interim boss.
In an unusually blunt statement Gould said: “The board felt that it was in the best interests of the group to accept Chris’ resignation and seek fresh leadership.”
Since taking over Finlayson has presided over a succession of profit warnings and a 37% slump in annual profits following a year blighted by problems in volatile Egypt, which accounts for around a fifth of production. There was more disappointment on Egypt today as the firm warned production would be at the lower end of its expected range, sending the shares down 4% or 46.75p to 1098.25p.
It is understood concern among the group’s major share-holders reached fever pitch over Finlayson’s suitability to push forward BG’s strategy unveiled in May last year. This included BG concentrating on fewer production assets as well as bringing in outside investors, to generate cash from assets at different stages to recycle into early growth opportunities. Sources said Finlayson, a 30-year veteran of Royal Dutch Shell, was seen more as a manager and engineer and lacking in deal-making expertise.
BG shares have underperformed the FTSE 100 in the past year. Around 8% of its shareholders are private investors, a hangover from the 1986 “Tell Sid” privatisation of British Gas. In 1997 British Gas shareholders approved the demerger of Centrica and in 2000 the renamed BG spun off electricity distribution into what became the National Grid.
