The Men Who Run Compass Group
LONDON -- Management can make all the difference to a company's success and, thus, its share price.
The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.
In this series, I'm assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today, I am looking at Compass Group , the world's largest contract caterer.
Here are the key directors:
Sir Roy Gardner
CEO, North America
CEO, Europe and Japan
Sir Roy Gardner has been chairman since 2006. In his executive career, he rose through the finance functions of GEC to succeed Arnold Weinstock as Managing director of GEC-Marconi. He joined British Gas as finance director in 1994 to oversee the demerger of Centrica, subsequently becoming CEO of Centrica.
Regarded as a City heavyweight, his non-executive career has not been without controversy. He became chairman of "fast-growing" property services group Connaught in May 2010, only to go into administration six months later. In the world of football, he became chairman and part-owner of Plymouth Argyle in 2009, resigning the next year shortly before it entered administration.
Sir Roy recently announced he will retire next year.
Richard Cousins has also been in post since 2006, but the CEO is a lower-profile character. He began his career in planning roles with Cadbury Schweppes and BTR, joining plasterboard maker BPB in 1990, and rising to become CEO in 2000. He took BPB into the FTSE 100, leaving for Compass when the firm was taken over by Saint-Gobain.
Compass's shares have tripled during the tenure of the current chairman and CEO.
A chartered accountant, Dominic Blakemore has been finance director for just 12 months. He was previously FD of Iglo Foods, which he joined from Cadbury, where he held various posts, including European Finance Director, and Group Financial Controller.
Compass's two divisional directors are also former finance professionals. Gary Green has been with the company since 1986, initially in finance roles, joining the board in 2007.
Andrew Martin joined as finance director in 2004, having previously been FD of First Choice Holidays. His move to run Europe and Japan was part of a reshuffle on the arrival of Dominic Blakemore, to free the CEO to concentrate on developing Compass's emerging markets business.
Compass's senior independent director Sir James Crosby abruptly resigned this week in the wake of criticism over his stewardship of HBOS. The timing is unfortunate, with the chairman having recently announced his retirement, but the company swiftly replaced him with Sir Ian Robinson, a director since 2006, and former chairman of Ladbrokes. However, the team of five non-execs look a little thin.
I analyze management teams from five different angles to help work out a verdict. Here's my assessment:
1. Reputation. Management CVs and track record.
2. Performance. Success at the company.
3. Board Composition. Skills, experience, balance
4. Remuneration. Fairness of pay, link to performance.
5. Directors' Holdings, compared to their pay.
Overall, Compass scores 19 out of 25, a very good result. Having four of the top five posts filled by accountants does not seem to have hampered the company's growth.
I've collated all my FTSE 100 boardroom verdicts on this summary page.
Buffett's favorite FTSE share
Legendary investor Warren Buffett has always looked for impressive management teams when picking stocks. His latest acquisition, Heinz, has long had a reputation for strong management. Indeed, Buffett praised its "excellent management" alongside its high-quality products and continuous innovation.
So, I think it's important to tell you about the FTSE 100 company in which the billionaire stock-picker has a substantial stake. A special free report from The Motley Fool -- "The One U.K. Share Warren Buffett Loves" -- explains Buffett's purchase and investing logic in full.
And Buffett, don't forget, rarely invests outside his native United States, which, to my mind, makes this British blue chip -- and its management -- all the more attractive. So why not download the report today? It's totally free and comes with no further obligation.
The article The Men Who Run Compass Group originally appeared on Fool.com.Fool contributor Tony Reading has no position in any stocks mentioned.Tony Reading owns shares in Centrica, but no other shares mentioned in this article. Motley Fool recommends H.J. Heinz Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.