Earlier than expected retirement for BAE's chief executive Turner
BAE Systems' chief executive Mike Turner said yesterday that he would quit the defence group when he reaches 60 in August next year, just four months after telling journalists he planned to stay on until he was 65.
Mr Turner strongly den-ied reports that he had been "ousted" by his fellow directors, insisting his forthcoming retirement was entirely his own decision. Of his pledge to stay until 65, he said : "What am I supposed to say, that I'm thinking of leaving? This decision to leave is mine, supported by the board."
Mr Turner said he was looking for "a new challenge" which could include becoming chairman of a major company and taking up non-executive directorships.
The shares finished the day unchanged at 510p, although he received a compliment from the market when they fell immediately after the announcement's debut on dealing screens. BAE, Europe's biggest def-ence contractor, also said he could leave the group with up to £2.36m in cash and shares if he meets targets. That will come in addition to his salary of £945,000.
Analysts said Ian King, the operating officer of BAE's UK businesses, was the early favourite to succeed Mr Turner.
While Mr Turner is widely seen as having done a good job for investors over the past five-and-a-half years – with the shares currently close to a nine-year high – controversy has seldom been far away during his reign.
The way yesterday's announcement was greeted with a flurry of speculation as to the reason – despite the robust insistence by Mr Turner, Dick Olver, the chairman, and the company that the decision was Mr Turner's with the support of the board – was typical.
Corruption allegations relating to the 20-year-old al-Yamamah arms deal with Saudi Arabia have swirled around the company for the past year despite its fierce denials of any wrong-doing.
An inquiry by the Serious Fraud Office was dropped after Government intervention on "national security grounds" but the company remains the subject of an inquiry by the Department of Justice in the US.
Mr Turner has also never been shy of engaging in noisy public disputes with the Ministry of Defence, his biggest customer. When he took over at the company through a boardroom coup, it was facing huge cost over-runs on two major pieces of work for the MoD, which resulted in a heated debate over how they should be divided up.
He has since sought to reduce the company's over-reliance on the UK and also sold European operations such as the 20 per cent stake in Airbus, while at the same time expanding its presence in the US, where BAE is the biggest overseas contractor.
Mr Turner was educated in Manchester and joined Hawker Siddeley Aviation, which later became part of BAE, as an apprentice undergraduate in 1966.
His job included work on the Harrier Jump Jet, and he eventually rose to become chairman of the company's commercial aerospace division in 1994. He became responsible for British Aerospace's defence export operation in 1996, joining the board of Airbus in 1998. In total he has spent 42 years with the company.