Pearson pays high price to hire Andy Bird as CEO
Pearson is paying a hefty price to recruit Andy Bird, the former boss of Walt Disney's international division, as the FTSE 100 company's next chief executive.
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Bird, who is already a non-executive director at Pearson, will replace John Fallon on 19 October. He worked at Disney for 14 years, expanding the company's reach in China, Russia and India, before leaving in 2018.
Pearson has been looking for a new CEO since December when Fallon announced his decision to step down. To acquire Bird's services the company has granted him $9.4m (£7.2m) of Pearson shares subject to performance.
The company is in the middle of a radical restructure to shift its products to digital and focus entirely on education. Sales of physical education books have slumped in the US but buyers have been reluctant to pay existing prices for ebooks. The company is expanding in areas such as language tests for governments.
Pearson said Bird, who is 56 and British, transformed Walt Disney International into a digital-first business during his time at the company. He left in a shakeup of top executives before Disney completed its purchase of Rupert Murdoch's film studio and other assets in 2019.
Bird will be paid a $1.25m salary fixed until 2023 at the earliest plus a 16% cash allowance in lieu of pension. Pearson said he would spend $3.75m on Pearson shares and that the company would award him 1.21m shares worth 7.5 times his salary that will vest in three stages according to performance.
Pearson said it consulted with a selection of shareholders about the "co-investment opportunity" which is outside the remuneration policy approved by its investors. Bird will also be eligible for a bonus worth 300% of his salary each year under the long-term incentive plan and Pearson will make "a contribution" towards the rent on an apartment in New York to be used for business purposes.
Pearson Chairman Sidney Taurel said: "Andy brings a wealth of international consumer experience, as well as significant expertise in building brands, transformational change and driving digital innovation. He is an inspirational and dynamic leader with an excellent track record of growth.
"Because of his experience and skills, he is extremely well placed to continue the transformation of Pearson, leading it to a new era of growth and enhancing value for all our shareholders."
Bird started his media career answering phones for Timmy Mallett in the 1980s on Manchester's Piccadilly Radio before going to Newcastle University. He then went into TV production, working with Mallett and Chris Evans, and was headhunted by Turner Broadcasting to expand its cartoon network in Europe. Bird left Turner in 2003 to spend time with his family but was almost immediately lured by Disney.
Shore Capital analyst Roddy Davidson said: "We are pleased to see the conclusion of what has felt like a protracted process and believe that Andy Bird is joining at an interesting time with much of the 'heavy lifting' and repositioning associated with its digital transformation now in place.
"The arrival of a new CEO should also provide an opportunity to re-energise the group’s investor proposition and potentially attract new interest from non-holders. We therefore look forward to learning more about his plans and credentials in the autumn."
Pearson shares rose 0.7% to 582p at 09:15 BST.