Defence giant Cobham leaps after boss heads for exit

Troubled defence and aerospace group Cobham has parted company with its chief executive Bob Murphy, less than two weeks after he told the Evening Standard he was staying in charge.

Cobham has poached technology group Laird’s chief executive David Lockwood to replace Murphy. Shares in Cobham rose 5% on the news, while Laird’s fell 6%.

Cobham said Murphy was “leaving to pursue other interests”.

He has been under increasing pressure following an accounting scandal, which forced a profits warning in April, and a £500 million rights issue to prevent its breaching its borrowing agreements with banks.

Questions had also been raised by investors about an alleged “culture of fear” in parts of the company and its ability to execute its strategy.

Murphy, a US citizen, who came in to run the business four years ago will leave by the end of the year with a £1 million-plus pay-off. That includes a year’s basic pay of £756,000, a pension contribution of £198,000 and perks largely made up of a so-called “expatriation allowance” of £210,000.

Lockwood, who was recruited directly by Cobham’s board led by chairman John Devaney, arrives on a basic salary of £690,000 and could quadruple that with annual and long-term bonuses if he were to spectacularly improve the company’s performance. Cobham said it would also buy out any outstanding share awards he had at Laird. At the end of 2015 these were worth around £3 million at the current Laird share price.

Cobham shares gained 6.8p to 169.4p, almost twice the deeply discounted rights issue price of 89p, while Laird shares fell 18.8p to 312.2p.

Analysts welcomed Lockwood, who has worked for BT, Marconi and BAE Systems, saying he had proved his ability to deliver complicated strategies at Laird.

Laird said its finance director Tony Quinlan, once of Drax, would take over from Lockwood as chief executive.