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AA shares plunge as boss is fired for 'gross misconduct'

01 August 2017

The AA has fired its executive chairman, Bob Mackenzie, for "gross misconduct", with immediate effect.

AA shares were down 10% at 217.90 pence per share on Tuesday.

The AA said that Mackenzie's responsibilities would be split, with Simon Breakwell, a non-executive director since 2014 and a founder of travel company Expedia, appointed as acting chief executive. The company, as previously disclosed, reiterated that it is in the process of splitting the combined roles of executive chairman as the company nears the end of the transformation programme.

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Mackenzie qualified as a chartered accountant with KPMG in 1978 and held positions as chairman and chief executive of National Car Parks and Green Flag, as well as chief executive of Sea Containers Ltd and Chairman of PHS Group plc, latterly stepping down as chairman of Northgate plc in September 2015 to join the AA. Martin Clarke will remain as chief financial officer.

In a trading update published alongside the announcement of Mackenzie's departure, the AA said it was confident about the company's long-term prospects but warned its financial performance in the first half of 2017 was negatively affected by a number of factors, including erratic work loads.

The company said it delivered a "robust performance" in the period, with membership to be "marginally" up year-on-year. AA said its in-house underwriter has continued to perform ahead of expectations with 220,000 policies underwritten in its first 18 months.

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It reported that "significant spikes in demand" in June and July meant it had not had enough roadside patrols in place to help drivers.

The company has also made changes to the way it accounts for certain products.

The AA also pointed to a negative impact from two other issues including an earlier-than-expected bill related to a profit-sharing arrangement.

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The company said its full-year performance would now be broadly in line with last year's.

AA shares plunge as boss is fired for 'gross misconduct'