Newspaper article The Evening Standard (London, England)

BHP Billiton Chief Quits after a Row with the Board

Newspaper article The Evening Standard (London, England)

BHP Billiton Chief Quits after a Row with the Board

Article excerpt

Byline: LACHLAN COLQUHOUN;PAUL ARMSTRONG

BHP Billiton chief executive Brian Gilbertson stunned the City today by quitting after only six months in the job.

The mining and petroleum giant cited "irreconcilable differences" between Gilbertson and the board, prompting speculation that his acquisition plans had been frustrated since the 2001 merger of Australia's BHP with South African based Billiton.

BHP said it had yet to agree a payoff with Gilbertson. However, it appears he could walk away with up to pound sterling6 million, based on his salary last year of $3.2 million (pound sterling1.89 million) and his two-year rolling contract.

He is guaranteed to get at least pound sterling2.45 million under a controversial termination clause which has added to BHP's reputation for poor corporate governance.

BHP shares fell almost 4% on today's news, though analysts blamed the reaction on the lack of an explanation from the company rather than investors' concerns about the loss of Gilbertson.

The company revealed immediately that chief development officer Chip Goodyear would become chief executive. The 44-year-old American, who joined BHP as finance director in 1999, is seen as far more conservative than Gilbertson and likely to put a greater emphasis on organic growth rather than acquisitions.

"None of us saw this one coming," said one broker. "There was talk about conflicting cultures, but no one expected it would come to this."

Other analysts believe the timing of Gilbertson's departure is significant given that it coincides with the emergence of several potential acquisition targets, including diversified miner WMC Resources and independent oil and gas group Woodside Petroleum - seen by some as key to BHP Billiton's oil strategy.

After Gilbertson's resignation was announced in a brief statement, regulators queried BHP Billiton on the reasons for the move and forced a clarification from the company.

"The resignation of Mr Brian Gilbertson is not related to any concerns by the board about the financial performance of the group," the statement said. …

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