LONDON -- Stagecoach (LSE: SGC.L) co-founder Sir Brian Souter is to move from his current role as CEO to chairman after the transport group announced big changes in its boardroom today.
Other board changes include the retirement of the current chairman, Sir George Mathewson, while Martin Griffiths, the current finance director, will become the new chief executive. Ross Paterson will move from director of finance and company secretary to finance director.
Souter set up Stagecoach in the 1980s, so it was no particular surprise to see that he will be hanging around a little bit longer. Souter, 58, said:
I remain committed to the success of Stagecoach and consider now to be an appropriate time to plan to take a step back from the day-to-day management of the business. I fully support the Board's decisions to appoint Martin and Ross to their new roles, which reflects a further continuation of the transition in responsibilities that has occurred over recent years. With a combined shareholding of over 25%, my family and I remain committed shareholders in Stagecoach and I will devote whatever time is necessary to effectively discharge my responsibilities as Chairman when that time comes.
Shareholders have a little time to prepare for these changes, though, as they don't come into effect until May 2013. Both Griffiths and Paterson, chartered accountants in their 40s, have been with Stagecoach since the late 1990s. Here at The Motley Fool, we do tend to prefer internal succession where possible, so this looks like a positive move.
Stagecoach did highlight the fact that the promotion of CEO to chairman is generally frowned upon in corporate governance circles these days, and it's seeking to mitigate these concerns by promoting a current non-executive to deputy chairman, as well as appointing a new non-executive director.
Stagecoach also provided shareholders with a quarterly trading update today, where it basically confirmed everything was on track to meet its profit targets for the year.
It's seeing the strongest growth in America, where its megabus operation seems to be doing exceedingly well. The only negative sales performance came from its London bus unit, but this was due to shedding some of its less profitable routes. Over the full year, Stagecoach expects the unit will make up these revenues elsewhere.
On the railways, Stagecoach suffered a minor disappointment last week with the loss of its West Coast franchise, but it said its bid for Great Western was making "good progress."
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