Perpetual loses CEO after board clash

6 Feb 2012, 4:58 pm   -   Source: AAP
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Investment firm Perpetual loses CEO after a clash with the board over the company's strategy.

Chief executive Chris Ryan is the latest departure from wealth manager Perpetual, after clashing with its board over strategy.

The matter came to a head at the weekend, when the board "agreed to disagree" with Mr Ryan's short and medium term strategies.

The board and Mr Ryan came to an agreement that he would leave the company immediately.

Mr Ryan was in the role for just one year.

His exit comes just two months after Perpetual lost its chief of equities John Sevior, who is expected to open his own fund manager in the coming months.

"Ironically we understand one reason for John Sevior's departure was a falling out with Mr Ryan," Morningstar analyst David Walker said.

The changes in senior personnel and volatile equity markets have seen Perpetual's funds fall in recent times.

About $600 million was lost in the three months to December 31, taking its total funds under management to $22.9 billion.

But investors welcomed Mr Ryan's departure on Monday, sending Perpetual shares up 77 cents, or 3.8 per cent, to $21.01.

"While Mr Ryan had executed some important business improvements after joining Perpetual in February last year, it had become clear that there were differences between Mr Ryan and the board around emphasis and execution of strategy for the immediate and longer term," Perpetual chairman Peter Scott said in a statement.

"Over the weekend, we agreed to disagree with Chris Ryan on these important issues and that he would leave Perpetual as a result."

Mr Ryan will be paid $1.2 million in cash in lieu of 12 months notice of his termination.

His immediate replacement, Perpetual's executive of private wealth and retail distribution Geoff Lloyd, signalled an acceleration of changes to the company's business practice.

"I have agreed with the board that we need to work harder and faster to refine the growth strategy for the business, deliver further meaningful cost reductions, and reinvigorate sales and distribution across the entire business," he said.

Morningstar's Mr Walker said Mr Ryan's priorities were similar to those outlined by the new chief executive, so the pace of progress on those areas was the likely cause of the clash with the board.

"There will be a period of uncertainty while the market waits to hear where the company goes next," Mr Walker said.

Companies with strategic uncertainty tend to underperform the market."

Mr Lloyd has more than 20 years experience in the financial services industry, and was formerly general manager of advice and private banking at BT Financial Group.

His annual salary will be $1.1 million, plus incentives.

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