OVERSEEING FINANCES at a FTSE100 top ten firm takes talent. But does the ability to navigate a multinational communications business qualify you to head up finance at a top investment bank?
Standard Chartered thinks so. Five months after current group FD Richard Meddings announced his departure, the emerging market specialists confirmed former Vodafone finance chief Andy Halford would take his place.
Halford, who received our Business Finance Awards’ Outstanding Industry Contribution Award for his achievements at the mobile phone giant, stepped down following nine years in charge of finances for Vodafone’s partnership with Verizon Wireless.
Prior to his promotion to group FD, Halford spent three years as CFO at Verizon in the US, after three years as FD for UK operating company Vodafone Limited.
Halford engineered Vodafone’s $130bn sale of the US network as his 15-year tenure ended, and was well considered by shareholders after delivering record dividends. He also played a key role in steering the company back into the black after the strategy led by former chief executive Arun Sarin resulted in £1bn cutbacks and 500 job losses in the UK as the financial crisis hit.
Work to be done a StanChart
Standard Chartered is likely hoping Halford can similarly right its own listing ship, following a recent run of falling profits, regulatory interventions and investor unrest.
A decade-long spell of increasing returns was broken last year, as slowing economic growth in Standard Chartered’s key markets of Asia, Africa and the Middle East contributed to a fall in profits.
The bank also took a knock from US watchdogs, who imposed a ($667m) £415m fine for breaching sanctions with Iran in 2012. By March, Standard Chartered shares had lost almost 40% on their October 2010 peak and, despite a second-quarter rally, remain more than 7% down on June 2013.
Declining performance and a poorly-perceived remuneration policy almost led to Standard Chartered seeing the UK’s first shareholder revolt on forward-looking executive pay since the binding vote was introduced in October.
Following a 41% vote against executive pay at May’s AGM, a top 20 investor told The Guardian the bank’s management had lost its “aura of invincibility”, having weathered the 2008 financial crisis without calling on a government bailout.
They said recent events had “opened it up to criticism”, adding the bank hasn’t “handled it very well”. Another shareholder criticised Standard Chartered’s lack of engagement ahead of the vote, suggesting it “didn’t communicate effectively or show any clear thinking”.
“A very odd hire”
Similar noises were made following Halford’s appointment, with Mediobanca’s Christopher Wheeler telling the Financial Times it was “a very odd hire”.
“He’s missing two elements, which are experience of banking and of Asia. Lots of things are going on at StanChart that we don’t really understand,” Wheeler said.
But Standard Chartered group chief executive Peter Sands is clear about Halord’s virtues. Halford will bring “deep experience of managing a complex, international business in dynamic and changing markets” to the role.
“He will bring complementary expertise to our team as we continue to grow our business and drive further value for our shareholders,” Sands said in the firm’s regulatory statement.
Halford joins the bank on 16 June, on a base salary of £850,000 with a fixed pay allowance of £700,000 (£416,500) in shares over five years, plus bonuses up to a maximum of 200%. He will also be awarded replacement shares worth £2.83m in lieu of Vodafone shares forfeited when he joins the Standard Chartered board on 1 July.
Out of the blocks in July
Outgoing CFO Meddings steps down on 30 June after 12 years with the bank. He confirmed his departure just one month after the BoE’s Prudential Regulation Authority (PRA) pressured Standard Chartered to remove him as head of risk, due to concerns over conflicts. The announcement coincided with the bank’s unveiling of a major restructure that will merge the wholesale and consumer banking divisions.
With analysts telling the Financial Times Standard Chartered was “definitely at risk” of a takeover bid in January this year, it seems Halford’s initiation is unlikely to be smooth sailing.