Mike Kane formally handed in his notice as Boral chief in February this year and will serve the required six months notice. So why will he receive termination benefits of around $2 million?
If due notice is given for a retirement there is surely no need to hand over more shareholder funds as a “termination” payment.
The departure gift was announced on Monday as chair Kathryn Fagg unveiled Zlatko Todorcevski as the new boss of the troubled building materials company.
Fagg was not the only one to be generous to Kane, because shareholders last November overwhelmingly approved $4.1 million in long-term performance rights.
In his eight years as boss Kane delivered a total shareholder return underperformance of 63 percentage points, with Boral posting a 42 per cent return against 105 per cent for the market over the period.
It was the latter years of the Kane reign which caused most concern and in particular the $3.5 billion Headwater acquisition.
A large percentage of shareholders want the company to sell all the US assets and concentrate on its Australian and Asian assets.
Fagg has a review underway, led by Macquarie and Flagstaff, and its findings will be an early call for the new boss.
Todorcevski’s appointment is best described as underwhelming given he has never run a company with his most recent executive job as finance chief at Brambles under Tom Gorman.
He has served as a director of Adelaide Brighton for the last few years along with board roles at Coles and Star.
It remains to be seen how the 52 year old turns that history into much needed decision-making at Boral and to be fair the jury is still out.
The surprise choice as new boss will hopefully also surprise the market with some decisive action when he takes over in September.
Adbri chair and controlling shareholder Ray Barro will no doubt be unimpressed that having an inside look at his company Todorcevsk is taking the reins as boss of its major competitor.
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