Overview: Friends Provident FD out of a job again
Prospects: Friends Provident FD falls victim to the zombies
Insurance titans Friends Provident and Resolution have revealed plans to
merge. The combined company will be known as Friends Financial, with an
expected market value of around £8.5bn.
But it will all be of little comfort to Friends FD Jim Smart, who will find
himself out on his ear for the second time in barely a year.
What’s happened?
Barely six months after being appointed as FD, on 1 January 2007, Smart has
found himself surplus to requirements.
Smart seems to be in the wrong job at the right time for the second
occasion.
Back in 2005, he had to leave Boots, the company which he had just joined as
FD, when it merged with Alliance Unichem.
In the ensuing corporate reshuffle Smart made way for George Fairweather.
What’s going to happen?
In announcing the merger, Friends and Resolution outlined who would be
filling the key board positions at the company which will operate under the
title of Friends Financial. The companies disclosed that the FD role would be
going to another Jim – Jim Newman, the financial brains at Resolution.
Resolution has been called a ‘zombie fund’ provider. Its funds are closed to
new entrants meaning it is the walking dead of the life insurance industry. Jim
is just the zombies’ latest unfortunate victim.
After this latest exit, Smart, 47 will be looking for another job, but his
severance package is sure to tide him over while he is seeking employment. The
details of the arrangement are unclear at this time, but Friends’ annual report
disclosed that when Smart joined the company on 13 November 2006 he signed on
for a base salary of £400,000.
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Up to December 2006, he earned £67,000 of that. He will have earned more
since, and with shareholders votes stretching on into October, he may just get
a full year’s salary.
His long-term incentive plan holdings, a total of 300,000 shares, could also
ease the blow.
The merger still needs to be rubber stamped by the shareholders of the two
camps, and if it is, Jim could be back on the market.
Wherever he goes, investors looking to spot the next takeover target may
follow.