Gartmore forces board to step down

The board of Management Consulting Group has stepped down under pressure from Gartmore, one of its largest shareholders.

Gartmore, which holds the stock in all its smaller company funds and owns a 20.3% stake in the company, called for an extraordinary general meeting (EGM) earlier this month in an effort to remove Kevin Parry as chief executive.

It argued that Parry’s remuneration was out of line with the company’s share price performance, which it said had deteriorated under his leadership.

Over five years to February 4, the company’s share price fell 27% compared with a FTSE Small Cap index increase of 64%, according to Gartmore.

Meanwhile, Parry’s cumulative remuneration over the past five years was 4.7m.

The shareholder meeting was scheduled to take place this week, but Parry and the group chairman, Rolf Stomberg, stepped down from their posts last week, in advance of the meeting.

The group finance director, Craig Smith, also tendered his resignation and will leave the company by August 19.

Further pressure for them to leave came last week when an even larger shareholder, Ineum Consulting, which has a 24.7% stake in the company, said it would support Gartmore’s resolution.

The search for a new chief executive for Managing Consulting Group has begun.

When the chief executive is appointed, the firm’s first priority will be to lead a review of group strategy and the composition of the board.

Meanwhile, it has appointed Alan Barber, chairman of the group’s audit committee, executive chairman with immediate effect.