By Jessica Hodgson
LONDON--U.K. newspaper publisher Trinity Mirror PLC (TNI.LN) said Friday that its Chief Executive Sly Bailey will step down almost six months earlier than planned following her her resignation last month amid a row with investors over her pay.
In a statement Trinity Mirror, which publishes the tabloid Daily Mirror and People newspapers along with around 130 regional titles, said Bailey would step down with immediate effect instead of at the end of the year as previously envisaged, ending a 10-year tenure at the helm of the company.
A company spokesman declined to elaborate on why Bailey had resigned earlier than planned.
Bailey will be replaced on an interim basis by Vijay Vaghela, currently group finance director, while Trinity Mirror searches for a more permanent replacement.
Bailey was awarded a salary for 2011 of GBP1.7 million, despite having presided over a dramatic decline in the value of the U.K. newspaper publisher's stock amid steep falls in newspaper circulations and advertising revenue. Shareholder anger over the pay policies prompted Bailey and the company's then chairman, Ian Gibson, to resign.
The row is one of a string of high profile spats between U.K. companies and their shareholders who are becoming increasingly muscular in demanding that management reduce what has been seen as excessive pay. The chief executive of U.K. insurer Aviva PLC, (AV.LN) Andrew Moss, also resigned under similar circumstances. More recently investors voted down the pay report of advertising giant WPP PLC (WPP.LN) in anger over the size of Chief Executive Martin Sorrell's pay, although they stopped short of calling for Sorrell's resignation.
Trinity Mirror's share price roughly halved during 2011, and during her time as CEO has fallen from around 460 pence to 26 pence today.
In the year ended Jan. 1, pretax profit fell to GBP74.4 million from GBP123.7 million the previous year, on revenue that was down to GBP746.6 million from GBP761.5 million, mainly due to a 7% fall in advertising sales.
More broadly, however, Bailey succeeded in protecting profitability during her time at the head of the company, despite falling revenues and has won some credit for this, but she faced criticism from analysts for failing to address the strategic challenges addressing newspaper companies, as they lose both readers and advertising to Google Inc. (GOOG) and other Internet services, as well as free newspapers.
In contrast with some newspaper groups which have made big bets in digital, Bailey's tenure has been characterized by a relentless focus on cost-cutting and has seen the closure of many newspapers and redundancies.
Shares in Trinity Mirror were trading down 1.9% at just under 26 pence by 11.30 GMT in London.
-Write to Jessica Hodgson at jessica.hodgson@dowjones.com
(Rory Gallivan in London contributed to this article.)
(END) Dow Jones Newswires
June 15, 2012 07:52 ET (11:52 GMT)
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