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[April 12, 2014]
Inmarsat made the right decision with management transition [Gulf News (United Arab Emirates)]
(Gulf News (United Arab Emirates) Via Acquire Media NewsEdge) Abu Dhabi: Inmarsat made the right move with its management transition, its outgoing Executive Chairman has said, who kept his chief executive pay pack under the strategy.
In 2012, Andrew Sukawaty moved to the Executive Chairman role of the satellite telephone and interenet services provider company when Rupert Pierce was internally promoted to chief executive. But in 2012 more than 40 per cent of shareholders protested plans to pay Sukawaty the same amount of money, Â£2.66 million (Dh16.3 million), as when he was chief executive.
"We promoted someone from within who had, I would say, less operational experience and more mergers and acquisition, legal regulatory experience. So they [the board] thought the two of us were a good pair for a period of time so that he got those experiences," Sukawaty said.
Sukawaty was asked by the Inmarsat board to take on the new position for three years while the new chief executive transitioned into the role, but Sukawaty's has maintained an active role to ensure a smooth transition, he said.
"Our board made a judgment and that was a good thing for the circumstances and uniqueness of our business," Sukawaty said in an interview.
Sukawaty was speaking to Gulf News at the Global Aerospace Summit in Abu Dhabi on Monday.
The shareholder vote, which the majority has ultimately voted in favour of Sukawaty hanging onto his pay packet, has improved in favour of the strategy each year since it was announced.
"We have done our best to explain and some people have accepted that and some people have not," Sukawaty said.
Preliminary results While Sukawaty argues the company has proven it opted for the right transition strategy he also believes that there is little for its shareholders to get upset about.
"I don't think our pay amounts [are that big] if you compare them in the industry or in the UK listed companies of our size. We don't pay exorbitantly," he said.
According to Inmarsat's preliminary results, profits were down by more than a $100 million in 2013 to $189.1 million. Sukawaty said this was partially due to Inmarsat following US and Federal Communication Commissions request to change its configuration to accommodate Lightsquared, its US mobile phone joint venture.
Lightsquared had said it would reimburse the costs but has since declared bankruptcy.
Sukawaty will step down as Executive Chairman at the end of the year but intends to stay on with the company. "I'm not intending to drift anywhere," he said.
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