Thomas Cook in leadership purge

London - Thomas Cook is dumping three board members in a leadership clearout to drive recovery from the profit warnings and funding crunch that have savaged its share price.

Among those departing is Bo Lerenius, who has been caught up in a string of boardroom reshuffles and corporate calamities over the past year.

“Bo Lerenius and Peter Middleton have decided to retire to allow the new chairman, Frank Meysman, more flexibility to refresh the board at this stage of the company’s development,” the world’s oldest travel company said.

The company said David Allvey, who was due to go after nine years, would leave with Lerenius and Middleton, a former Thomas Cook chief executive, at its annual shareholder meeting on February 8. All three are non-executive directors.

Senior non-executive director Roger Burnell had also agreed to retire at the 2013 annual general meeting.

Thomas Cook dropped its chief executive in August and installed Meysman last month after arranging a new £200m lifeline in November, its second new financing arrangement in five weeks.

The holiday operator has been hit hard by tough trading, especially in Britain where its core customer base of families with young children is struggling in tough economic conditions.

Its shares lost over 90% of their value last year. They were unchanged at 15.5 pence at 13:15 GMT, valuing the former FTSE-100 company at £136m.

“To say that 2011 was a challenging year for our group is an understatement,” Meysman said in the company’s annual report, published on Wednesday.

“During the year, the board was disappointed that management performance in certain areas fell short of the standards that we demand. Decisive action was taken,” he said.

Thomas Cook is being run by Sam Weihagen on an interim basis while it searches for a chief executive to replace Manny Fontenla-Novoa.

The annual report showed Fontenla-Novoa received a payoff worth £1.17m, incorporating payment of 12 months basic salary but no annual bonus.

Lerenius has been caught up in a string of boardroom reshuffles and corporate calamities over the last year as chairperson of infrastructure firm Mouchel and a member of the audit committees at security firm G4S and property group Land Securities.

He quit Mouchel in October after contract blunders and government spending cuts triggered a slide in its share price, and left the board of Land Securities in July after seven years at Britain’s largest listed landlord.

Lerenius is still on the board of G4S, which came in for heavy criticism after a proposed £5.2bn ($8.1 billion) takeover of Danish form ISS collapsed.

Lerenius, a former chief executive of Stena Line and Associated British Ports, had been on the board since 2007.

Middleton, also a former chief executive of Lloyd’s of London, had been a non-executive director since 2009.
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