G4S has announced that Nick Buckles is stepping down as CEO, 11 months after the company botched its contract to supply enough security for the London Olympic Games. Buckles resigned after 28 years with the company, eight of which as CEO. The current G4S CFO, Ashley Almanza, will replace him.
The security company, one of the largest in the world, has announced that Buckle’s final financial package will be worth around £16m. He will receive a one-off payment of £1.2m for his contractual notice period, which includes his annual salary of £830,000 as well as £332,000 pension allowance and £20,000 car allowance. He has also built a £9.5m pension pot over his 28 years at the company and owns around £5.5m in shares.
Keith Vaz, chairman if the Commons home affairs committee that questioned Buckles after the Olympic Games has expressed he was “astonished” by the £1.2m payout, considering his participation in the security fiasco. He added that the payout should not be “misunderstood as a reward for the spectacular failure of the Olympics contract.”
When G4S failed to hire and train enough security forces to patrol the Olympic Games last summer, Buckles appeared before the home affairs committee and admitted the botched contract was a “humiliating shambles.” However, he still maintained that the company should have been paid in full for the contract. British troops had to be drafted in to cover the shortfall.
Shortly after the Games, G4S reported around £70m in losses on the contract. The company, however, absolved Buckles of any personal responsibility and concluded in an internal report “it was [in] the best interest of the company and all of its stakeholders” that the CEO remain in his position.
Since the Olympic Games, however, G4S has suffered a series of troubles, including being forced to abandon its £5.3bn bid for Danish cleaning company ISS after shareholders intervened. The Ministry of Justice has also announced recently that it would be investigating if G4S and Serco were overpaid for contracts for electronically monitoring offenders.
“What changed was the profits warning a few weeks ago – this was the final straw,” said Caroline De La Soujeole, an analyst at Cantor Fitzgerald Europe. “It dawned on people that this couldn’t go on. The focus had become too much about Buckles and not the business itself.”
Buckles resignations comes hot on the heels of a profit warning, and has come as something of a surprise. His departure was announced less than one week before G4S’ general meeting, where he would be up for re-election.
“There is no huge animosity towards to him but there was a sequence of events and the board has decided it was time for a new style of management,” an unnamed shareholder told The Guardian.
Current G4S CFO, Ashley Almanza, will replace him after joining the company three weeks ago.