As FirstGroup profits plummeted, its CEO, Tim O’Toole, has stepped down from the Board and his position.
The move came after the transport giant reported a loss in its profit before tax of 4.8%. In the 12 months to 31 March 2018, its operating profit before tax was £197m, compared to £207m for the same period in 2017. First Bus like-for-like passenger revenue increased 1.1%. One of the most significant losses was in its Greyhound division in the US, where its like-for-like revenue decreased 0.7%. It experienced long haul demand challenges from intensifying airline competition in the period.
Tim O’Toole has agreed to be placed on garden leave until his employment with the company ends on 30 September 2018. He will continue to receive his current salary, benefits and pension until that date. A maximum payment of £699,167 in lieu of Tim’s salary, pension, car allowance and medical insurance will then be made in eight equal monthly instalments. The Company will reimburse Tim, up to a maximum of £9,000 per year, for expenses relating to taxation advice for years 2017/18 and 2018/19. He will also receive a capped contribution towards reasonable legal fees incurred in connection with his departure.
Tim O’Toole said: “The time is right for me to step aside. Today’s results clear the way for the new approach sought by our Chairman and the Board. I should like to thank the 100,000 employees who work so hard to deliver for our customers every day. It has been a privilege to work with them.”
Wolfhart Hauser has become Executive Chairman until such time as a successor is appointed. Matthew Gregory will be appointed Interim Chief Operating Officer with immediate effect, and will also continue his responsibilities as Chief Financial Officer. The process to select a new Chief Executive is underway.
FirstGroup Chairman, Wolfhart Hauser, said: “On behalf of the Board I would like to thank Tim for his distinguished leadership of the company since 2010. During that time the Group has reinvested in its businesses, restored free cash generation and substantially strengthened its balance sheet. The Group is now a more stable and resilient enterprise, with a growing ability to capitalise on its leading positions in diverse transport markets.”
For more on FirstGroup and its earnings, see this week’s French Connection on pages 14-15.