Prudential chairman likely to depart
Harvey McGrath, the chairman of Prudential, could be the first high profile victim of the failed attempt to buy AIG's Asian operations. The multibillion pound bid eventually failed due to an inability to agree a price as well as market factors which turned against the company. However, the very fact that the "non-acquisition" has cost Prudential in the region of £450 million is the main reason why major shareholders such as Fidelity are looking for a fall guy.
It is rumoured that city minister Lord Myners is being lined up as the future chairman of Prudential although nothing has been confirmed via official channels. The problem for Prudential at the moment is the fact that shareholder confidence in the group, and especially the directors, has never been lower and this could leave the company open to a potential takeover approach. So far there have been no firm moves in this particular direction although rumours continue to circulate around the City.
Over the last two years we have seen a significant increase in shareholder activity against various boards of directors at many well-known UK companies. Shareholder power is now becoming stronger and more and more remuneration packages are being questioned with many companies forced to "adjust" terms under pressure from institutional shareholders.
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