MELBOURNE: The world’s largest diversified mining group, BHP Billiton Ltd/Plc, announced the surprise resignation of chief executive Brian Gilbertson yesterday, citing “irreconcilable differences” with the board. Its executive director Chip Goodyear, known for his rigorous financial analysis, was appointed as the new CEO with immediate effect.
BHP Billiton gave little indication of the differences which led to the change just six months after Gilbertson assumed the top job at the group, created 18 months ago by the merger of London-listed Billiton and Australia’s BHP.
But analysts said South African Gilbertson, who built up Billiton through acquisitions and dominated the company before its merger with BHP, was probably at odds with a more conservative board led by a strong chairman, Don Argus, once head of Australia’s biggest bank, National Australia Bank.
BHP Billiton shares fell 4% on the news to A$9.92 in a broader market that was up 0.7%, as analysts pointed to the uncertainty created by the management change.
Goodyear had played a key role in turning around the ailing BHP before its merger with Billiton, but did not have the global experience or reputation of Gilbertson, independent strategy group Caiani & Co director Carlo Caiani said.
“It is going to be nearly impossible for BHP Billiton to replace Brian Gilbertson. This is definitely something that has gone off the rails,” he said.
BHP’s shares have risen just 1.2% since the merger, but have outpaced a 12% fall in the broader Australian market, while profits have been hit by tough commodity markets, falling nearly 12% before one-off charges in 2001/02 to US$1.93bil.
Goodyear, a former Kidder, Peabody and Freeport-McMoRan executive, joined BHP in 1999 as chief financial officer and has been chief development officer for the BHP Billiton group since June 2001.
In a brief statement, he said he would support targets to build on existing businesses where there was an opportunity to be industry leader across BHP Billiton’s global portfolio of oil, coal, iron ore, industrial metals and diamond interests.
“It’s a shock and a surprise to see Brian Gilbertson go,” said J.P. Morgan analyst Richard Rossiter.
“But Chip Goodyear should stabilise any concerns in the short term, given the market support he has had since joining BHP.”
Some analysts were surprised Goodyear was not appointed as an interim CEO, pending the result of a wider search.
BHP Billiton declined to give more details of the board ruction but said it did not relate to differences with individuals or any concerns by the board about the financial performance of the group. – Reuters
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