Prudential chairman to step down

Harvey McGrath, chairman of Prudential, is to step down next year after bearing the brunt of shareholder criticism over the group’s costly failed bid for Asian rival AIA.

“I feel the time is coming when my other commitments deserve more of my time and energy,” McGrath, 59, said in a statement yesterday.

More than a fifth of Prudential shareholders voted against re-appointing Mr McGrath at the insurer’s investor meeting in May in protest over the botched AIA deal, which left the company to pick up £377m in costs and fees.

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The unusually large dissenting vote showed Mr McGrath had become the main focus of investor resentment over the AIA debacle rather than chief executive Tidjane Thiam, who had initially been seen as equally culpable.

Mr McGrath, who needed a simple majority of votes to keep his job, said at the time he had no intention of stepping down.

“If you look at the AGM result this year, it was clear the chairman was going to go at some point,” said one analyst who asked not to be named.

“It was just a matter of timing before the announcement came out.”

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Mr McGrath will leave in 2012 once a successor has been found, Prudential said. There has been speculation he could be replaced by Howard Davies, a former chairman of the Financial Services Authority who joined the insurer as a non-executive director in October last year.

Prudential, Britain’s biggest insurer, was forced to pull its $35.5bn AIA bid after shareholders baulked at the price.

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