(Sharecast News) - Shares in educational publisher Pearson dropped on Wednesday morning after the company announced the exit of its chief executive Andy Bird, who has been in the role for three years.
Pearson said that Microsoft executive Omar Abbosh would take Bird's place in early 2024 as he retires. The stock was down 4% at 849.2p in early deals.
Bird joined as Pearson's boss in October 2020 from Walt Disney, and the stock has jumped by nearly two thirds under his leadership.
"It has been an enormous privilege to lead Pearson through a period of significant change over the last three years. The business is now firmly established as a digital-first learning company, with technology driving significant growth," Bird said in a statement on Wednesday. "We are well positioned for future growth with a clear vision and a strong management team to deliver it."
Abbosh, currently president of Microsoft's Industry Solutions business, is a highly regarded leader with over three decades of experience in enterprise technology, Pearson said. Prior to Microsoft, he was a senior leader at Accenture.
Abbosh said: "I am honoured to have been appointed as the next chief executive of Pearson. The company is at an exciting stage of its growth journey in markets that are increasingly digital."
Pearson said it would pay Abbosh an annual base salary of £1m, plus an annual cash allow of 16% of base salary in lieu of pension. He also has the opportunity to earn 300% of base salary through the company's annual incentive plan.
Furthermore, the company is paying him £245,050 to make the move from Disney, as well as awarding him "restricted shares of equivalent value to a maximum of 50,813 Microsoft shares" which will vest over the next three years. At current share prices and currency, this is equivalent to £13m.
CEO pay has been a sticking point with Pearson shareholders already this year, with 13% voting against Bird's pay at an AGM in April. Bird earned £6.8m in 2022 and was set to take home £8.8m in future years under new remuneration plans. Some 46.37% of shareholders had voted against the company's proposed remuneration policy.
Pearson (PSON)