Schroders Names Harrison as CEO as Dobson Moves to Chairmanby
Pretax profit rose 14 percent and dividend up 12 percent
Schroders shares jump to highest since January in London
Peter Harrisonwas appointed chief executive officer of Schroders Plc, Europe’s largest publicly traded fund manager, as the company reported a 14 percent increase in pretax profit. The shares rose.
Harrison, 49, the firm’s head of investment, replaces Michael Dobson who is stepping down in April after more than 14 years as CEO. Dobson, 63, will become non-executive chairman at the firm next month when current chairman Andrew Beeson retires, Schroders said in a statement on Thursday.
Schroders shares rose to the highest in almost two months and were trading at 2,785 pence at 9:16 a.m. in London. The company’s stock value has climbed about 270 percent during Dobson’s term and reached a record last year.
“Michael has been an exceptional leader of the business for over 14 years. During that time, profits have reached a record level in excess of 600 million pounds ($845 million), assets under management have tripled and significant value has been created for shareholders,” senior independent director Philip Howard said in the statement. “Dobson is the outstanding candidate for the chairman role and the board’s unanimous choice.”
The U.K. corporate governance code states that ordinarily a CEO should not go on to become chairman and when it happens, the board should consult shareholders. The firm has spoken to major investors and clients about Dobson’s role, for which he will be paid 625,000 pounds a year.
Schroders doesn’t expect to make any payment to Dobson for giving up his role as chief executive, and there won’t be any contractual provision for compensation when he leaves the chairman’s role, Howard wrote in a letter to shareholders.
The company said that full-year pretax profit increased to 589 million pounds compared with 517.1 million pounds in 2014. Schroders raised its full-year dividend 12 percent to 87 pence a share. Net inflows for the year to Dec. 31 were 13 billion pounds, compared with 24.8 billion pounds in 2014, according to a statement.
“Full year results were overall in line with our expectations,” Keith Baird, an analyst at Cantor Fitzgerald, wrote in a note to clients. “Given the uncertainty on markets, we remain cautious on the shares and retain our hold recommendation.”
Non-executive director Ashley Almanza will not seek re-election to the board because of his commitments as CEO at G4S Plc, according to the statement.