BAE Systems Plc (BA/), which last year drew investor ire for seeking a merger with the parent of Airbus SAS, said it will consult major shareholders as it seeks a new chairman to replace Dick Olver, who helped develop the plan.
BAE aims to announce a successor to Olver, who is due to retire in May 2014, sometime this year, Nick Rose, the company’s senior independent director and the man leading the search, said in its annual report published today.
Olver met with opposition from BAE investors including Invesco Ltd. (IVZ:US), the No. 1 shareholder, over the talks with European Aeronautic, Defence & Space Co., which eventually failed amid government opposition. Olver, who joined the board of Europe’s largest armsmaker in 2004, defended the merger plan in the report, saying it would have created a global leader in technology across both commercial aerospace and defense.
“Prior to the discussions with EADS last year, we knew we had a robust standalone strategy and business plan, but if a board is to provide strategic leadership it also needs to look at wider opportunities to deliver shareholder value,” he said. “The merger discussions were at no time seen as a replacement for the group’s established strategy.”
The BAE board met six times to review progress during the EADS talks, which ran from June to October, the report reveals.
After the plan failed, Olver and Chief Executive Officer Ian King said they’d revert to the original blueprint of seeking long-term export markets, growing in cyber-security and boosting revenue from services, and one key objective this year is to develop “a comprehensive narrative” of this strategy, BAE said.
King’s total pay was cut 8.6 percent last year to 2.2 million pounds ($3.3 million) on a lower bonus, while Olver’s compensation increased by 5.8 percent to 745,000 pounds, the report shows.
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