Bapcor CEO Darryl Abotomey departs early after board fallout

Bapcor’s board appointed external advisers to conduct a major review of workplace culture, blindsiding senior managers and igniting threats of resignation.

Bapcor boss Darryl Abotomey will exit the car parts business earlier than originally planned following a ‘marked deterioration’ with his relationship with the board.

Bapcor’s board appointed external advisers to conduct a major review of workplace culture – a move that blindsided the company’s senior managers and led to threats of resignation.

The review, announced in an email to staff, came a week before the company abruptly ended the tenure of longstanding managing director Darryl Abotomey.

In a statement on Monday, Bapcor said there had been a “marked deterioration” in the relationship between the board and Mr Abotomey in the weeks after the company announced a leadership change in late November.

Mr Abotomey had been expected to retire from Bapcor – one of the country’s largest provider of car parts, equipment and accessories – in February.

Bapcor’s share price has dropped 22 per cent since it announced that Mr Abotomey would retire. It closed down 6 per cent on Monday to close at $6.41.

Mr Abotomey’s departure from Bapcor, which has a market value of $2.3bn, came amid tensions between company executives and the board.

The chairman of the Bapcor board’s culture committee, James Todd, told staff last Tuesday that the board had “heard concerns” and “as a result we have commenced a broad review into our workplace culture”.

“We consider this review is necessary so that we can ensure Bapcor is a safe and fulfilling place to work,” he wrote. “The review will also consider a formal complaint that has been made.”

According to two sources close to the company who spoke on condition of anonymity, some senior managers interpreted the message as an attempt to undercut their authority.

To ease their concerns – and threats of a walk out – Mr Abotomey and Mr Todd jointly wrote a second letter the following day.

That email said: “As we come out of Covid we consider it an appropriate time to take a pulse check of the Bapcor culture and identify what we can do, together, to further develop Bapcor’s great culture. “The board and group leadership team are proud of the inclusive and diverse Bapcor business culture which has delivered amazing value to all stakeholders,” the note read.

The rift between management and the board has extended to shareholders, with AustralianSuper understood to be wary of the decision to eject Mr Abotomey. But institutional investors are now backing the board and have agreed to review the company’s performance in 12 months.

AustralianSuper declined to comment on Monday.

Bapcor founder Garry Johnson, who remains the company’s sixth-largest shareholder, said he was “deeply distressed” by the way Mr Abotomey was treated.

“To be treated near the end of his term in such a disgraceful way is a reflection on the poor respect for a very successful person,” he said. “He was appointed for three years, and at the end of which time he would have resigned. It would have given time for a new CEO to be appointed under his watch and he would have left in a dignified and respectful manner for his work and achievements.”

The Australian’s DataRoom column on Monday reported that Mr Abotomey was held in high regard by a number of major investors who had considered lobbying the board to keep him.

It also revealed that talks had been held within the company to force Mr Abotomey out before an earlier agreed date on February.

Mr Abotomey earlier this year signed a contract to stay with Bapcor until October 2023 but said he would retire in February.

The company, in its ASX statement on Monday, said the board had “by unanimous decision … taken steps to exercise Bapcor’s rights and has now elected to bring forward his retirement end date … immediately”.

Mr Abotomey’s abrupt exit also means the company’s anointed temporary chief executive, Bapcor director Mark Powell, is not available.

His position will be handed to Bapcor chief financial officer Noel Meehan until a permanent chief executive can be found.

Mr Meehan was previously an executive at Toll Group and Treasury Wine Estates.

Bapcor chairwoman Margie Haseltine said: “We are disappointed to be taking this step earlier than anticipated and thank Mr Abotomey again for his contribution to the growth of Bapcor since its IPO.”

Egon Zehnder is conducting a “well progressed” search for Mr Abotomey’s replacement.

“The leadership transition presents an opportunity for Bapcor to install a more contemporary leadership and management approach to drive the company’s growth while also ensuring, consistent with changing stakeholders’ expectations, an appropriate governance and oversight framework remains in place,” the Bapcor statement read.

Mr Abotomey’s legal representatives on Monday flagged potential legal action.

Ross Levin, a workplace partner at Mills Oakley, said Mr Abotomey was “considering his legal position”. “All we can say is the situation is disappointing for the shareholders and the staff of Bapcor,” Mr Levin said.

Bapcor, which runs the Autobarn, Autopro and Burson retail chains, was listed in 2014 with a, market capitalisation of $300m.

It changed its name from Burson Group in 2016.

The majority of its business comes from trade customers and mechanics, with net profits rising 47 per cent to $130m in the year to June 30. The company employs 5000 staff and has more than 1000 outlets.

Under Mr Abotomey, Bapcor expanded into Asian markets including Thailand, where it has six Burston outlets. It acquired a stake in Singapore-listed company Tye Soon in March.

Mr Abotomey did not respond to requests for comment.

A Bapcor spokeswoman said the review was commissioned by the business “to take a pulse check of the Bapcor culture”.