FIRSTGROUP chairman Martin Gilbert will today face fresh shareholder pressure to step down over continued under-performance of the firm.
Analysts have criticised the board’s “numerous and significant” management “failings” which have caused First’s share price to drop significantly since a surprise profits warning in March.
Chief executive Tim O’Toole waived his right to a £350,000 bonus after a weak performance last year.
Rumblings in the City have seen fingers pointing at Gilbert whose role has been the subject of speculation that he has failed to hold the board to account and that, as chief executive of FTSE 100 company Aberdeen Asset Management, he is too stretched. Gilbert has been chairman of First for 17 years, which has also caused some to speculate it is time for fresh blood.
An analyst said: “It is fair to say that management failings have been numerous and significant.
“I don’t understand how someone who is a FTSE-100 chief executive has time to do other directorships and I’ve no idea why boards allow it.”
First has maintained an equivocal stance about Gilbert’s continuation as chairman, although it insists it maintains “a regular dialogue with our shareholders across a range of issues”.
Sources have suggested O’Toole has met FirstGroup’s biggest shareholders and was confident they would back Gilbert who will be up for re-election at today’s annual general meeting in Aberdeen.
Gilbert has spent recent weeks slimming down his portfolio of City jobs. He is also a non-executive director at BSkyB. But he stepped down from the board of Aberdeen Football Club last month after AAM sold its 24 per cent stake in the club.
This month, he also stepped down from the chairmanship of Lloyds’ insurer Chaucer after a deal to sell it to US-based Hanover.
The FirstGroup board is expected to update its shareholders on the proposed sale of £100 million worth of bus assets despite the collapse of a planned deal to sell a business in North Devon and Cornwall to Stagecoach.
Shareholders will receive reassurance that the sale of assets, which it announced along with its profts warning, are progressing despite the Office of Fair Trading’s (OFT) decision to refer the deal worth just £2.8m.
A spokesman for the group said: “We are confident we will get these away. We have a long list of potential bidders for our operations.”
But Douglas McNeill, analyst with Charles Stanley, warned: “I don’t think it is a great time to be selling.
“There is some degree of regulatory risk around – as the Devon case showed – and it is during a time when business confidence is at a low ebb and confidence is an important factor in any market.”
Karl Burns, an analyst at Shore Capital, has warned that the group “could come close to its banking covenants” in 2014 if it is not successful in its bids for further rail franchises.
It is expected that the Department for Transport will make a decision to award the West Coast mainline in August. First is on a shortlist of four, which also includes incumbents Virgin and Stagecoach.