ITV debacle

Following on from the ITV debacle on hiring a new chief executive, came the news this lunchtime that ITV are no longer going after Tony Ball.

The board at ITV have decided not to surrender to Ball's pay demands, and his insistence on a right to veto over a new chairman to replace Michael Grade.

At the same time ITV have also confirmed that Michael Grade would be standing down as chairman. It will end his three-year reign at the top of the broadcaster, leaving the company temporarily captain-less in the midst of the worst advertising crisis in its history.

Sir Crispin Davis, the former chief executive of Reed Elsevier, the publishing group, was immediately installed as a front-runner to replace Mr Grade by industry insiders. Other names on ITV's shortlist are understood to be Sir Christopher Bland, the former chairman of the BBC and BT, and Sir Michael Bishop, the founder of bmi and a former chairman of Channel 4.

In a statement to the Stock Exchange, ITV said that its negotiations with Ball "highlighted a number substantial differences, including a failure to finally agree contractual arrangements" and that there had been an unspecified disagreement as to who would chair the company in the future.

Despite the fact the speculation about the new ITV appointment has been in the press for months, according to company insiders, the final straw for ITV's non-executive directors was Ball saying that he had to endorse the new chairman to replace Grade. ITV's board believed that a strong, independently chosen chairman would be needed to counter Ball's forceful personality.

It has been well documented that Ball had been making some excessive demands over pay. Ball, a former chief executive of BSkyB, initially demanded a pay and shares package, which was worth up to GBP £42 million over five years. This included a backdating of the price of his share options to reflect an average of the past six months trading when the shares were lower. That would have meant that the strike price was 33p, leaving the options immediately in the money compared with today's 45p.

ITV's board were prepared to offer him a package worth GBP£20 million to GBP£25 million. In days of talks, the two sides got closer on the pay demands, but failed to strike a deal on the chairman issue.

The company's nominations committee met last night and unanimously agreed to end talks with Ball in the wake of the difficulties. The final decision was communicated to Ball via a phone call and e-mail sent at 12.15pm by Sir James Crosby, the former HBOS chief executive, who is the chairman of ITV's nominations committee.

It wasn't expected that Grade, who is currently the executive chairman would quit though, but that he would stay on as a non-executive. Grade will step aside when the chairman is appointed, and the new company head will now be given the task of finding a new chief executive.

It appears that it will be a long time until the ITV saga ends.

25/09/2009

Like this article? Get the RSS feed: