BXB Brambles

 

TIDMBXB 
 
RNS Number : 2892A 
Brambles Limited 
06 October 2009 
 

Brambles Limited 
Company Number: 118 896 021 
 
 
 
 
6 October 2009 
 
 
 
 
Brambles announces succession plan 
Mike Ihlein retires as CEO; Tom Gorman, currently Group President, CHEP EMEA 
named as CEO (elect) 
 
 
Brambles Limited (Brambles) today announced that Chief Executive Officer, Mike 
Ihlein will retire from his role effective 1 November. Mr Ihlein will be 
succeeded by Tom Gorman, currently Group President, CHEP EMEA. 
 
 
Mr Gorman has been chosen by the Board to lead the Company into its next growth 
phase. To ensure a smooth transition, Mr Ihlein will remain as an executive and 
continue to be available to Tom Gorman until 1 March 2010. 
 
 
Mr Ihlein's decision to retire follows nearly six years with Brambles during 
which time he was Chief Financial Officer, before becoming CEO in 2007. Under Mr 
Ihlein's leadership, Brambles has had a strong period of sales growth, profits, 
EPS and cash generation. 
 
 
Brambles' Chairman, Mr Graham Kraehe, thanked Mr Ihlein for his contribution, 
noting his key role in a period of major change in the Company to position it 
well for the future. 
 
 
"Mike has made a strong contribution to Brambles during an important period of 
the Company's development," said Mr Kraehe. "In his initial role as CFO, Mike 
was critically involved in the successful repositioning of Brambles' portfolio 
to focus on CHEP and Recall. As CEO he reorganised the management structure of 
the Company to facilitate growth and successfully expand into a number of new 
geographies and market segments, including Poland, Germany, China, India and USA 
Food Service. Mike has also laid the foundations for the next phase of business 
improvement through his leadership and oversight of the CHEP USA Review and its 
outcomes." 
 
 
Mr Ihlein added: "I have been in the corporate world for 35 years, and have been 
considering my ongoing role in executive life for some time now, particularly 
given the amount of time I have spent travelling away from home." 
 
 
"The successful conclusion of the CHEP USA Review is a logical point for me to 
decide to retire. I am very proud of what we have been able to achieve during 
the critical period of renewal at Brambles over the last 6 years." 
 
 
Mr Kraehe said that Mr Gorman was the logical successor for the role of CEO, 
with a strong operational background, extensive international experience in 
senior leadership roles and a successful track record since joining Brambles in 
early 2008. He was the unanimous choice of the Board following an extensive 
executive search process. 
 
 
"We have all been impressed with Tom's leadership of CHEP EMEA in the last 2 
years. Despite the global challenges, that business unit has delivered strong 
cash generation performance and importantly Tom has played a key role in 
strengthening relationships with key customers. 
 
 
"Brambles is in a great position to ensure a smooth transition to Tom as CEO 
supported by the rest of the executive team, the Board and Mike at a time of 
exciting new opportunities for the Company, our shareholders and our people," Mr 
Kraehe said. 
 
 
Prior to joining Brambles, Mr Gorman had a long career with the Ford Motor 
Company, and served as President Ford Australia from March 2004 until January 
2008. Further biographical information is attached. 
Mr Gorman said: "Brambles is very well placed for the future and I am excited to 
be leading the business at a time of emerging new growth and business 
opportunities for both CHEP and Recall. 
 
 
"We have excellent operating models, strong market positions, and great 
prospects for growth as economies recover. 
 
 
"The first major priority for me is to ensure we successfully execute our 
comprehensive response to the CHEP USA Review and I look forward to working 
closely with the CHEP USA team to deliver this new service and quality offering 
for our customers." 
 
 
Mr Gorman will take on the role of CEO effective from 1 November 2009 and will 
join the Brambles Board on 1 December 2009. 
 
 
=----------------------------- Ends ------------------------------- 
 
 
 
 
Attachments: 
A)    Summary of key contract terms for Tom Gorman 
B)    Termination entitlements for Mike Ihlein 
 
 
Attachment A: Summary of key terms and conditions of employment for Tom Gorman 
 
 
Commencement date and term 
 
 
Tom Gorman will commence in the role of Chief Executive Officer on 1 November 
2009. He has an on-going contract, which may be terminated by Brambles without 
cause on giving 12 months notice and by Mr Gorman without cause on giving 6 
months notice. 
 
Brambles may also terminate Mr Gorman's contract without notice in the event of 
serious misconduct. 
 
 
Remuneration package 
 
 
Mr Gorman's contract provides for the following remuneration package: 
 
 
  *  Total Fixed Remuneration (TFR), comprising salary and all other benefits (other 
  than incentive plans) of A$1,800,000; and 
  *  Participation in Brambles' incentive plans in line with current policy: 
 
oShort-term incentive (STI) opportunity of 45% of TFR (target) and 67% 
(maximum); 
oGrant of STI Share Awards, the value of which will match the STI payment each 
year; 
oGrant of annual long-term incentive share awards (LTI Award) equal to 115% of 
TFR. 
 
The manner in which these incentive plans will apply to Mr Gorman is as set out 
in sections 3.2, 3.3 and 4 of Brambles 2009 Remuneration Report (pages 36 to 38 
of its 2009 Annual Report, which is on Brambles' website (www.brambles.com). 
 
 
Both TFR and Total Remuneration are positioned at around the market median of 
companies of a similar size to Brambles. 
 
 
Termination entitlements 
 
 
In the event that Mr Gorman's employment is terminated by the Company without 
cause, he is entitled to a payment equal to 12 months' TFR (inclusive of any 
payment in lieu of notice) and accrued entitlements. 
 
 
No STI Share Awards or LTI shares will normally vest in these circumstances. 
However, if Mr Gorman's employment is terminated in accordance with the "good 
leaver" provisions of Brambles 2006 Performance Share Plan:- 
 
 
  *  Any of his unvested STI Share Awards will vest at the date of cessation of 
  employment. 
  *  Any of his unvested LTI Share Awards will be retained and tested against their 
  performance conditions on the date they vest. Subject to the satisfaction of the 
  performance conditions, the number of Brambles shares to which Mr Gorman is 
  entitled would be reduced pro-rated by the period of his employment during the 
  relevant performance period of the LTI Share Awards. 
 
 
 
Mr Gorman's entitlement to any payments under the STI and LTI Plans upon his 
termination will be subject to the Plan Rules and satisfaction of the applicable 
business and personal performance conditions. 
 
 
 
 
 
 
Attachment B: Termination entitlements for Mike Ihlein 
 
 
Mike Ihlein has agreed to remain in Brambles employ until 1 March 2010 to assist 
the transition to the new CEO, at which point he will retire. Mr Ihlein has 
announced that he will resign from his position as CEO and from the Board on 1 
November 2009. 
 
 
Summary of termination entitlements 
 
 
Mr Ihlein will be entitled to the following payments and benefits upon ceasing 
employment: 
 
 
  *  6 months TFR (inclusive of payment in lieu of notice period). This equates to a 
  cash payment of A$1,181,500; 
  *  Payment for any accrued annual leave and long service leave at the date of 
  cessation of employment; 
  *  Pro-rated STI payment determined by performance against objectives for the 2010 
  financial year. Performance will be assessed and the payment determined and paid 
  at the date of cessation of employment; 
  *  Vesting of unvested STI Share Awards at the date of cessation of employment in 
  accordance with the terms of the 2006 Performance Share Plan (163,499 shares); 
  and 
  *  Unvested Enhanced STI Share Awards and LTI awards will be retained and 
  performance conditions to which they are subject will be assessed, and subject 
  to those conditions being satisfied, will vest at the normal assessment date, in 
  accordance with the Plan Rules. The number of Brambles shares to which he will 
  be entitled will be reduced pro-rata for the portion of the performance period 
  to the date of cessation of employment. The maximum number of awards that can 
  vest, subject to performance, is 27,114 Enhanced STI share rights and 268,796 
  LTI share rights. 
 
 
 
The total value of the Enhanced STI and LTI awards are not currently known as 
the performance testing of these awards will not be completed until the end of 
their respective performance periods, in accordance with the Plan Rules, but it 
will be disclosed in the Annual Report and Accounts for the 2010 and 2011 
financial years. 
 
 
 
 
 
 
 
 
For further information please contact: 
 
 
+------------------------------------+----------------------------------+ 
| Investors & Media:                 |                                  | 
+------------------------------------+----------------------------------+ 
| Michael Roberts                    | James Hall                       | 
| Vice President                     | Manager                          | 
| Investor Relations & Corporate     | Investor Relations & Corporate   | 
| Affairs                            | Affairs                          | 
| +61 2 9256 5216                    | +61 2 9256 5262                  | 
| +61 418 263 199                    | +61 401 524 645                  | 
| michael.roberts@brambles.com       | james.hall@brambles.com          | 
|                                    |                                  | 
+------------------------------------+----------------------------------+ 
 
 
Brambles is globally headquartered in Australia 
 
 
 
 
 
 
 
 
Robert Gerrard 
Group Company Secretary 
 
 
 
 
For further information on Brambles and all company announcements, presentations 
and webcasts, please visit the company website www.brambles.com. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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