Leighton chair 'in tears' as CEO departs

LEIGHTON chairman Robert Humphris was clearly uncomfortable in announcing respected chief executive Hamish Tyrwhitt had been forced out of his job.

"I find it gut-wrenching. I've been in tears today," Mr Humphris told reporters on Thursday as the company appointed Marcelino Fernandez Verdes as the new head of Leighton.

Mr Fernandez Verdes takes Mr Tyrwhitt's place as Leighton's majority shareholder, German-based construction firm Hochtief, moved to increase its stake from 59 per cent to 74 per cent.

Spaniard Mr Fernandez Verdes is chief executive of Hochtief, a position he will maintain while heading up Leighton.

Hochtief insisted on board and management changes at the Australian construction company as part of its $1.2 billion deal, and Mr Tyrwhitt, along with chief financial officer Peter Gregg, were accordingly terminated immediately.

"It's very distressing for me personally that we have had to accept the resignation or departure of Hamish Tyrwhitt and Peter Gregg," Mr Humphris said as he sat alongside Mr Fernandez Verdes.

"Obviously it was a resignation they had to make."

Mr Humphris and Mr Fernandez Verdes paid tribute to the outgoing Mr Tyrwhitt, who was not available for comment.

"I welcome the challenge to lead Leighton through its next phase of global growth, building on the solid foundation established by Hamish and his colleagues during the last three years," Mr Fernandez Verdes said.

He will relocate from Germany to Australia for his new role.

Mr Tyrwhitt, 50, became chief executive of Leighton in 2011, taking over from David Stewart who had followed the long-serving Wal King into the role.

Mr Tyrwhitt has ended a 27-year career at Leighton, in which he held positions in Australia and spent a long stint in Asia, where he developed an interest in feng shui.

Morningstar analyst Ross MacMillan said Mr Tyrwhitt and Mr Gregg were both extremely well regarded, noting the effort they had been putting into turning around the company, including the collection of around $5 billion in unpaid bills.

"It's quite surprising that they would be terminated at this point," Mr MacMillan said.

Thursday's fall in Leighton's share price, down 1.3 per cent to $21.96, was attributable to the loss of the executives, as the Hochtief deal was beneficial to shareholders.

Hochtief is paying $22.50 a share to acquire three out of every eight outstanding Leighton shares - an increase on $22.15 offered on Monday after negotiations with Leighton's board.

Mr Tyrwhitt and Mr Gregg are not leaving empty-handed however.

Mr Tyrwhitt will be paid a year's base salary, about $2.4 million, subject to shareholder approval, as well as $11.4 million in incentive pay and unvested incentive share payments.

Mr Gregg will also receive a year's pay plus incentive payments worth around $9 million.

Both men will assist with the changeover to new management until March 28.

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