The investors of BAE Systems, the defence giant, have called for the resignation of Chairman Dick Olver, following the failure of merger with European defence giant EADS. Invesco Perpetual, which owns 18% of BAE Systems, led the revolt.
Invesco Perpetual argued that BAE System’s reliance on mergers and acquisitions has increased over the past few years and the need of the hour seems to be fresh leadership which will provide BAE Systems with a new direction to promote growth through its core business activity which includes sale of aeronautic equipment.
Invesco Perpetual’s fund manager Neil Woodford wote a letter to the board asking for Dick Olver and Sir Peter Mason, the senior independent director, to step down from their positions and to begin the search for their replacements. Siding Invesco Perpetual was shareholder representative group ShareSoc, which called for Olver and chief executive Ian King’s resignations. ShreSoc said it regarded the merger plan was “misconceived, mishandled and simply a mistake”.
It may be noted that Invesco Perpetual had vehemently opposed the £30 billion BAE Systems- EADS proposed merger. Invesco Perpetual also felt that BAE Systems had enough opportunities as a stand-alone company exploring its potential in the Middle-East with defence contracts in the region and by building up its security operations.
BAE Systems has supported its chairman in the event of the investors’ opposition and has dismissed Invesco Perpetual and its fellow dissenters as being in a minority. BAE Systems said in a statement that it fully supported its directors and also considered the shareholders’ views.
The statement said, “The company intends to continue with its established succession plans described in its last annual report, including the appointment of a successor to Dick Olver as chairman following an appropriate process to identify the best candidates.”