Prudential chairman comes under shareholder fire at AGM
20 May 2011
Prudential chairman Harvey McGrath faced a massive shareholder rebellion over his reappointment in what is seen as investor anger over its failed takeover of Asian insurer AIA last year.
The damaging vote of no confidence proved to be much bigger that what the company had expected over the insurer's botched £22-billion takeover of Hong Kong-based rival AIA last year.
The deal which could have potentially doubled the insurer's presence in the fast-growing Asian market, cost the company £377 million in advisers' fees and prompted calls for resignation of McGrath and chief executive Tidjane Thiam.
Though Thiam has been able to regain investor confidence thanks to the robust performance put up by the company following last June's aborted AIA deal, McGrath continues to be under pressure say analysts.
Though the dissenting vote failed to unseat the chairman, experts say, the size of the rebellion could render his position untenable over the long term.
Around 22 per cent of investors voted against McGrath's re-election, at the annual shareholder meeting in London in addition to those who withheld their support. With this 26.8 per cent of investors did not back McGrath.
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