THE CHAIRMAN of Prudential has finally paid the price for the insurer’s failed takeover of Asian rival AIA and said he will step down next year.
Harvey McGrath will leave after more than a fifth of Prudential shareholders voted against his re-appointment in May. He became the focus of dissent after the $35.5bn (now £22.63bn) deal for AIA was scrapped, despite anger aimed initially at chief executive Tidjane Thiam.
Prudential was left to pick up a £377m bill in costs and fees for the aborted deal. At the time McGrath argued the firm had the right strategy but yesterday analysts said McGrath’s departure had been inevitable.
One friend said last night: “Harvey took a lot of the brunt for what happened last year and now it’s a good time for him to go graciously.”
McGrath, who took up the post in January 2009, will leave in 2012 once his successor has been found.
Yesterday the 59-year-old said he wanted to pursue interests in the “public, educational and philanthropic sectors” and added: “I feel the time is coming when my other commitments deserve more of my time and energy.”
There has been speculation McGrath could be replaced by Howard Davies, who was the first chairman of the Financial Services Authority and joined the insurer as a non-executive director in October last year. He resigned as director of the London School of Economics in March over its links with the Gaddafi family.
Thiam faced calls for his head in the aftermath of the AIA debacle but has since won back investors’ confidence by delivering a strong trading performance and raising the dividend.
Shares in Prudential closed up two per cent last night at 620.5p.