Bob Mendelsohn is getting £1m for leaving R&SA in a pitiful state, says Jason Woolfe
He's taking a £1m golden handshake for reducing one of the world's oldest insurance companies to a pitiful state.
Bob Mendelsohn is leaving Royal & SunAlliance (R&SA) after four years and nine months in the driving seat, during which time it has withered disastrously.
The company's share price has been on a long downward slide as he has consistently failed to get on top of the aftermath of the appalling 1996 merger of Royal Insurance and Sun Alliance.
The group's results have been terrible and look even worse when compared with those of rival Aviva.
Mendelsohn made the right decision to ditch life insurance and has found himself in what should be R&SA's ideal market.
Rates for commercial business in the group's chosen market are better than ever. And what's happening?
R&SA presents an unedifying sight, scrabbling for capital, flogging bits of itself, and fiddling with the life accounts in a desperate bid to write business.
And in the meantime, Aviva boss Patrick Snowball shows every sign of seizing on a golden opportunity to make hay while the sun shines. Mendelsohn's head was the price to be paid for investors to support R&SA's much-trailed rights issue. His departure in itself wasn't enough to lift the flagging shares, which closed down a penny after last Thursday's announcement.
Legal & General's announcement last week that it was launching a rights issue just made R&SA look even slower.
So caretaker chief Bob Gunn has the unenviable role of trying to placate exasperated shareholders.
He's spoken of making the company more focused, but he'll have to be utterly ruthless if he wants to catch up with Aviva. For the cynical broker, worried about falling service standards and less competition, it does not bode well.
Despite his bonhomie, Mendelsohn will not be missed.