Pearson CEO Resigns, Microsoft Executive Set to Take Over
London-based education company, Pearson, experienced a 5% drop in shares after the unexpected announcement that Chief Executive Andy Bird would be stepping down. Bird, who had only been in the position for three years, managed to increase the company’s share price by over 60% since late 2020 and was on track to deliver a mid-teens operating margin in 2023, two years ahead of schedule.
Investors are also expressing concerns about the incoming CEO, Omar Abbosh. The 57-year-old Microsoft executive is set to receive a compensation package of £13 million in cash and restricted shares on top of his regular pay. This has raised eyebrows, especially since earlier this year, nearly half of Pearson’s shareholders voted against a pay package of over £8 million for Bird.
There is also apprehension about Abbosh’s potential for a radical pivot in the company’s strategy. Despite Pearson’s focus on digital platforms, revenue is expected to remain stagnant over the next three years, according to forecasts from the London Stock Exchange Group (LSEG). This leaves investors questioning whether Abbosh’s appointment is a wise investment.
Pearson has had a turbulent past with profit warnings and missteps, so it is understandable that shareholders are cautious about the company’s future under new leadership. The departure of Bird, who had overseen a significant rise in share price, adds to the uncertainty.
The news of Bird’s resignation and Abbosh’s appointment comes as a surprise to the market. Pearson now faces the challenge of maintaining investor confidence and charting a steady course forward. The educational publisher will need to address concerns about the compensation package and assuage fears regarding potential strategic shifts.
Pearson is a major player in the education industry, providing a range of services including textbooks, digital learning tools, and assessments. The company has faced various challenges in recent years, particularly with the shift towards digital platforms in education. As the sector continues to evolve, Pearson’s ability to adapt and innovate will be crucial for its long-term success.
The company’s shareholders will be closely watching Abbosh’s leadership and his ability to navigate the changing landscape of education. Pearson’s future growth and profitability will depend on its ability to stay relevant in an increasingly digital world.
Overall, the announcement of Andy Bird’s resignation and Omar Abbosh’s appointment as Pearson’s new CEO has raised concerns among investors. The company will need to address these concerns head-on to maintain shareholder confidence and drive future success in the education sector.
More detail via Reuters here… ( Image via Reuters )