Marjorie Scardino steps down as Pearson boss
Published 03/10/2012 | 15:45
MARJORIE Scardino is to step down as chief executive of Pearson after 16 years, handing the reins to John Fallon, head of its international education division.
Mr Fallon, who has helped the media group to expand in developing markets such as China and India, will take up his new role on January 1 and joins the Pearson board with immediate effects.
Although Dame Scardino has been expected to step down for some time, the timing and swiftness of her handover has surprised analysts and raised questions about the group, which owns the Financial Times newspaper, the book publishing business, Penguin, and a growing number of educational institutions around the world.
“It is unexpected,” said Ian Whittaker at Liberum. “While questions had been asked when Ms Scardino would step down, no one expected any announcement now and certainly not one where there would be such a short time frame between the announcement itself and the exit of Ms Scardinio.”
Mr Whittaker, who has a sell on Pearson, added that Dame Scardino’s departure sent a “negative signal” about the business. “We think Ms Scardino may be exiting while the going is relatively good. That is perhaps a harsh verdict but our view is that, if the turnaround was close, Ms Scardino would be staying to see it through.”
Pearson has spent the last decade trying to evolve from a business heavily dependent on print revenues from established economies like the US, to one that is increasingly focussed on digital products and services in growth economies such as China and India.
Pre-tax re-tax profits jumped 72pc to £1.16bn (€1.5m) in 2011 and revenues edged up 4pc to £5.86bn as digital sales grew by nearly a fifth to contribute a third of total sales.
However, the group also warned of a slowdown in profits and advertising revenues at the Financial Times Group.
Dame Scardino’s departure immediately raised expectations that the Financial Times could be sold, with analysts pointing out that Mr Fallon does not share her “emotional attachment” to the newspaper.
Dame Scardino said it had been a “privilege” to be part of “such a great company for a small part of its history”.
“Though we’ve changed the company beyond recognition from its form in 1997, we are still in the foothills of the climb to make all kinds of learning more accessible and more effective for more people.
“I know that John, the board, the senior team and our 40,000 people have the bravery, imagination and decency to lead the company to new ways of achieving these goals, while holding on to the traditions and values that make Pearson unique.”
Mr Fallon, who has been chief executive of Pearson’s international education arm since 2008, added: “Marjorie’s legacy is a company with a strong performance record, a deep commitment to its wider social purpose and a unique culture. I am proud to be part of the company; it is a tremendous honour and responsibility to be asked to lead it.”