BAe boss Cahill may leave well before contract expires

PUBLISHED : Monday, 03 January, 1994, 12:00am
UPDATED : Monday, 03 January, 1994, 12:00am

LONDON: John Cahill, the chairman of British Aerospace, may step down well before his contract expires in April 1997.

Industry and City sources believe he may leave this year, barely two years since he was head-hunted for the job after Sir Roland Smith was ousted in a boardroom coup.

If Mr Cahill goes, his successor could be Dick Evans, BAe's chief executive. Another possible candidate is Lord Hesketh, the former Department of Trade and Industry minister who joined the board as a non-executive director on December 23.

Three other directors were appointed at the same time: Sir Robin Biggam, chairman of BICC, as a non-executive, and John Weston and Mike Turner as executive directors.

The arrival of Mr Weston and Mr Turner potentially frees Mr Evans to take the chairman's seat should Mr Cahill leave.

Mr Weston heads BAe's defence subsidiary, the group's profits powerhouse, which makes the Tornado, Hawk and Harrier aircraft, while Mr Turner is expected to take responsibility for BAe's commercial aircraft operations, including its 20 per cent stake inthe Airbus Euro-consortium.

Mr Cahill's five-year contract aroused controversy last year when it was revealed that, with his main home in Florida, he was registered as an American taxpayer and was paid in dollars through the British company's US subsidiary. His salary is US$800,000.

Under the contract, Mr Cahill was also due to receive options to buy shares worth $3.2 million at prices prevailing ''in or around'' September 1992.

The share price today is almost double the early September 1992 price, and more than three times the price at the end of the month.

Formerly chief executive of BTR, Mr Cahill joined BAe in May 1992, seven months after the group hit a financial and management crisis when a GBP432 million (about HK$4.92 billion) distress rights issue was followed by Sir Ronald's removal.