Shockwaves At St George Chief's Move To Westpac
Sydney Morning Herald
Saturday August 18, 2007
ST GEORGE BANK has moved quickly to weather the storm of the sudden loss of its chief executive, Gail Kelly, to its big domestic rival Westpac, by slotting her most likely internal successor, Paul Fegan, into the top job on an acting basis.
Mrs Kelly's departure to Westpac yesterday sent shockwaves through the 8500 staff who work for the country's fifth biggest bank, despite a spate of rumours and market speculation over the past few months that she was the favoured outside candidate to succeed David Morgan.St George went into immediate damage control, with the bank's chairman, John Thame, swiftly elevating Mr Fegan - whom Mrs Kelly had been grooming as a potential replacement - to the acting CEO's role.Mr Fegan joined St George shortly after Mrs Kelly's appointment as managing director nearly six years ago. He moved from National Australia Bank in 2002 to head St George's rapidly expanding wealth management division, and his brief was expanded three years ago to include retail financial services.Mr Fegan was identified as the most likely internal candidate to take over from Mrs Kelly in April, when he was further promoted to run the combined retail bank and wealth management division in a company restructuring.He will run St George while the board conducts an accelerated search for a new CEO, which Mr Thame said would include internal and external candidates.It is thought that the process could scrutinise senior executives at Westpac and ANZ, which have now both appointed new bosses from outside despite their own longstanding internal succession plans.Possible applicants include Phil Chronican, who lost out to Mrs Kelly at Westpac, and Brian Hartzer - the head of retail banking at ANZ, which gets a new chief executive, Michael Smith, at the start of October. Mr Smith is joining ANZ from HSBC.But St George is known to be keen to promote from within. Mr Fegan and the newly appointed finance director, Michael Cameron, whom Mrs Kelly poached from Commonwealth Bank, where he was head of the huge retail bank, will have the inside track.Mr Thame was careful in his statement announcing the loss of his highly regarded CEO to praise the skills of Mr Fegan and Mr Cameron."Importantly, we are fortunate to have a talented and experienced executive team that will continue to to execute our organic strategy," the chairman said.He also emphasised that the reshuffled management team had just put in place revised three-year and five-year strategy plans to continue the bank's success in delivering double-digit earnings growth during Mrs Kelly's tenure.The bank's shares shrugged off the disappointment of her loss by giving up just 10c yesterday to close at $32.58. In contrast, Westpac gained 43c to $25.20.
© 2007 Sydney Morning Herald