Marjorie Scardino, 65, “has decided to step down” as chief executive of Pearson at the end of the year. Current head of their international education division John Fallon, 50, will take over on January 1, 2013. The company notes his “division is fundamental to Pearson’s growth strategy,” having grown to £1.4 billion in sales and employing 15,000 people in 70 countries.
As education has come to dominate Pearson–and produce solid growth–analysts and investor have often lobbied for the sale of the FT Group and Penguin. Scardino had vowed not to sell the FT, but with the change at top, Ian Whittaker at Liberum Capital tells Reuters, “We see John Fallon as having no emotional commitment to the division. We value the FT Group at around 770 million pounds.”
Investec analyst Steve Liechti speculates: “Fallon is not a life-long publisher, so could be more brutal in his strategic direction in time, and shareholders would push for asset sales and cash returns in our view.”
Bearnstein Research says in a brief report, “This appointment signals continuous focus on international growth, where the majority of the redeployed capital deriving from divestitures has gone.” Like other analysts, they wonder “what will be the impact on the top tier of management, and in particular whether any of the other key executives will leave.’
Pearson notes that under Scardino’s leadership, sales have tripled and profits have grown even more. Chairman Glen Moreno says: “Under Marjorie’s leadership, Pearson has fundamentally shifted its business portfolio towards all kinds of learning, its geographic exposure towards fast-growing economies and its product mix towards digital and services. It has been a radical and highly successful transformation.’ He adds, “John is an experienced and effective leader who has planned and led the tremendous growth of our international education business over the past decade. He is an outstanding executive to build on Marjorie’s many achievements.”
Announcement
Reuters