Pru shareholders question Bloomer's 'assassination'

Pru shareholders question Bloomer's 'assassination'

Prudential's small investors yesterday gave their backing to sacked chief executive Jonathan Bloomer as he attempted to make a dignified exit from the insurer after 10 years on the board.

The company was accused of subjecting the ousted executive to a "murky assassination" in March when his departure was announced.

Yesterday was officially his last day, and unusually he made a presentation at the annual meeting in which he expressed disappointment at leaving and made it clear he believed he was handing his successor a company in good shape.

Private investors at the meeting gave the departing chief executive a warm round of applause - in contrast to the City, which criticised the 51-year-old in October for an unexpected £1bn rights issue.

His replacement - former colleague Mark Tucker - starts today after a brief tenure as finance director of banking group HBOS, and will immediately face questions about his strategy for the group.

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One small shareholder, Alma Munson, said: "I'm rather disappointed that ... the board [has] got rid of Jonathan Bloomer when he seemed to have done quite a good job."

Another, John Farmer, said: "We seem to be in the anomalous situation of a tribute being paid to a chief executive who is mysteriously being replaced". Mr Farmer went on to say that "arguably a murky assassination [has] gone on".

He pressed Sir David Clementi on the circumstances surrounding the decision to axe Mr Bloomer just before Easter, asking whether it was because of pressure from institutional investors angered by the October cash call.

Sir David replied that it was "fair to say" that the response of some institutions to the rights issue was "negative".

He nevertheless insisted: "We did not come under severe institutional pressure to make the change we did. The board's view was that the group would benefit from fresh leadership."

Later, Sir David said he was confident the group had handled the succession issue well. "We took a view on what was in the long-term interests of shareholders."

In naming Mr Tucker to replace Mr Bloomer, who is to receive a £1.6m pay-off, Sir David has brought back a highly regarded executive who spent almost 20 years at the group before walking out two years ago when he was convinced he would never get the top job.

Sir David insisted it was possible to pay tribute to the departing executive and to appoint fresh blood to the board. He said that Mr Bloomer was leaving the group "in much better shape than he found it" but that Mr Tucker's appointment was "forward-looking".

Sir David said Mr Bloomer had made a "significant contribution" to the insurer during one of the "severest" markets it has ever endured.

The chairman also played down any reversal in the Pru's strategy after Mr Tucker starts work today. The proceeds of the unpopular rights issue are largely being used to channel growth in Britain but not at the expense of its businesses in Asia or the US, the group says.

Mr Bloomer paid tribute to the board colleagues who backed his departure and expressed a "personal thank-you" to shareholders who first elected him to the board in 1995, initially as finance director and then as chief executive.

The rights issue was "certainly the right thing to do", he said, and appeared to suggest the insurer had enough capital now to sustain its growth plans.

Guardian Unlimited © Guardian Newspapers Limited 2005