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New Pearson boss to run company from Los Angeles

·3 min read
Pearson 
Pearson

The new boss of publisher Pearson is to continue living in Los Angeles - despite an eight-hour time difference with its London headquarters.

Former Disney executive Andy Bird has been told he can remain based in California after taking charge of the business behind GCSE and A-level exams in October, when he will replace longstanding boss John Fallon.

Mr Bird will also get a golden hello worth $9.3m (£7.1m), and Pearson will contribute towards the rental costs of a New York apartment for business use so that Mr Bird can split his time as needed.

Shore Capital media analyst Roddy Davidson said that while in principle he would prefer the chief executive to be full time in the UK, the US is by far Pearson's largest market and there could be benefits in having its boss there. The firm's biggest office is in New Jersey.

He said: "[The US] is also the area in which it has had greatest difficulty for some time - so perhaps not a bad thing and may make it easier to attract US shareholders who tent to attribute a higher value than their UK counterparts to digital businesses."

Mr Bird - who was born in Warrington and began his working life answering phones for British radio DJ Timmy Mallet, before helping launch the career of Chris Evans - will get $9.3m of shares after buying $3.75m of stock with his own money. He will be paid a maximum of $7.7m a year.

A media veteran who ran the international arm of Walt Disney, overseeing its transformation into a "digital-first" brand, Mr Bird will seek to steer Pearson through the fallout from the coronavirus pandemic from his LA base almost 5,500 miles from London.

Mr Fallon, who has led the FTSE 100 firm since 2013, announced last December that he would leave this year. He will step down from the board but remain as an advisor until the end of 2020.

Pearson has struggled in recent years as the publishing industry has been battered by the rise of online rivals, with the firm issuing a string of profit warnings.

However, it was one of the few big companies to retain its dividend this year as lockdown forced schools and universities to shift operations online.

Notably under Mr Fallon, it sold off Penguin Random House, the Financial Times and a stake in The Economist.

Sidney Taurel, Pearson chairman, 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."

Mr Bird will have to contend with activist investor Cevian, which has increased its stake in Pearson, strengthening its potential claim to a seat on the board as it campaigns for a shake-up.

Cevian Capital managing partner Christer Gardell told Bloomberg on Monday that he expects Bird to deliver profitable growth and value for shareholders.