By Sarah Young
LONDON (Reuters) – British defence firm BAE Systems (BAES.L) named Charles Woodburn as its chief operating officer, making the former oil executive heir apparent for the chief executive’s role.
BAE’s statement on Monday followed media reports on Sunday that Woodburn would be appointed to the role before taking over the top job from Ian King in 12 to 18 months. King has run BAE since 2008 having formerly been chief operating officer.
Woodburn, 44, who formerly worked at oilfield services company Schlumberger (SLB.N) and is currently chief executive at private equity-backed Expro, will join in the second quarter of 2016 and be paid a base salary of 750,000 pounds ($ 1.1 million).
King highlighted Woodburn’s international focus as an advantage for BAE, the third biggest defence company globally, which makes over a third of its sales in the U.S. and Canada, and a fifth in Saudi Arabia.
“As a highly qualified engineer with considerable international business experience, Charles will strengthen and broaden the strategic and operational capabilities of the business as a welcome and valuable addition to the leadership team,” King said in a statement.
Chairman Roger Carr said that Woodburn would build up his understanding of the defence industry under King, calling his appointment “part of our succession planning programme.”
Woodburn will need to get to grips with BAE’s biggest customer — Britain’s ministry of defence — as the company takes part in a 31 billion pound programme to build the replacement for the country’s nuclear submarines.
BAE is expected to benefit from rising military spending in Britain and the U.S., after years of cutbacks, and new demand for its cyber defence services.
But it also faces challenges. It is under pressure from the British government to deliver big, complicated projects like the building of two new aircraft carriers on budget, and to secure a long-delayed sale of a new batch of Typhoon fighter jets to Saudi Arabia to extend its production further into the future.
KeplerCheuvreux analyst Christophe Menard said the appointment was positive for BAE.
“Seeking an outsider could bring a fresh vision to BAE, which needs to reinvent and re-position part of its business, after years of difficulty budgetary environments,” he said.
Woodburn, who has a PhD in engineering from the University of Cambridge, will also be paid 1.62 million pounds earnt at Expro but forfeited as a consequence of joining BAE.
The company’s shares traded up 1.9 percent to 475 pence, broadly in line with the FTSE 100 index. BAE is scheduled to report annual results on Thursday.
(Reporting by Sarah Young; Editing by Paul Sandle and Keith Weir)
