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July 6, 2011 11:40 pm
UK satellite operator Inmarsat on Wednesday named Rupert Pearce, head of the company’s enterprise division, to succeed Andrew Sukawaty as chief executive from January 1 2012.
Mr Sukawaty who has been chairman of the company since 2003 and its chief executive since 2004, will take on the role of executive chairman, for at least two years.
That will finally make a structural and long-awaited separation of the chairman and chief executive roles at the company, as required to conform to corporate governance rules.
However, analysts pointed out that as executive chairman Mr Sukawaty would still play a very active role in management. “It is moving in the right direction – but investors might hope that ultimately the executive position would be transformed into a non-executive chairman role,” said Morten Singleton, analyst at Investec.
Mr Pearce, a former Link-laters lawyer who is also currently Inmarsat’s general counsel, has been at the company for six years and has been instrumental in its recent strategic deals.
These include the acquisition of Stratos, Inmarsat’s largest distributor, and also a deal to share spectrum in the US with LightSquared.
Mr Sukawaty has been generally well regarded by investors but came under fire last year for a pay deal awarding him a £1m share bonus in addition to his £1.28m a year pay package.
The change of management takes place as Inmarsat prepares to confront turbulent times.
The shares have lost 22 per cent of their value during the past year after Harbinger Capital, the US fund controlled by Philip Falcone, sold its stake in Inmarsat, dispelling any hopes of a takeover for the company.
Inmarsat also reported disappointing revenues at its important maritime division this year.
Inmarsat is undergoing a technology transition from providing voice services to broadband internet services. As sailors on ships have shifted to using e-mail rather than phone calls, however, the company’s revenues have fallen.
Analysts are also worried that Inmarsat’s satellite services for governments and for the aeronautical sector will face intensify pressure as spending cuts begin to bite.
They are bracing for further disappointment next month when the company reports interim results.
Inmarsat is also planning to spend $1.2bn in the next three years on a new fleet of satellites with broadband internet capability, a move which has dismayed investors who were hoping the company would not have to invest in new satellites so soon.
Inmarsat shares closed down 1p at 562p on Wednesday.
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