A major overhaul of top management at Edinburgh-based Cairn Energy got under way on Thursday as Mr Simon Thomson, the current legal and commercial director of the firm, as well as Chairman of its Greenland board, was named as the company's new Chief Executive.

As of July, he will replace Sir Bill Gammell, the company's founder, who in turn will become Chairman of both the group and remain as Chair of Cairn India, with responsibilities for the Vedanta transaction.

Also stepping down are Non-Executive Chairman, Mr Norman Murray; Chief Operating Officer, Mr Malcolm Thomas; and Engineering and Operations Director, Mr Philip Tracy.

The current Finance Director, Mr Jann Brown, will become the firm's Managing Director. All these changes will also be applicable from July 1.

‘Safe pair of hands'

While the timing and extent of the changes – happening as the attempt to sell a majority stake in Cairn India to Vedanta continues – came as a surprise to the market, the choice of Mr Thomson as Sir Bill's replacement did not – at least to some.

“Simon is a safe pair of hands and has been groomed for this role,” one analyst who spoke on condition of anonymity told Business Line . While till recently Mr Thomson had had a relatively low profile at the company, at the most recent investor day last week at which the company provided an update on its Greenland operations, it was Mr Thomson who fronted the event.

Mr Thomson, 46, has worked for Cairn Energy since 1995, when he joined as a lawyer, after graduating from Aberdeen and Glasgow universities.

He was appointed as the company's Legal and Commercial Director five years ago.

Another analyst who also spoke on condition of anonymity pondered the implications of the choice of Mr Thomson, with a non-engineering background, rather than Deputy Chief Executive, Dr. Mike Watts, who the analyst described as the “brains behind the Greenland operations.”

Gammell, the founder

Cairn Energy was founded by Sir Bill in 1980, and listed on the London Stock Exchange in 1988, since when its market capitalisation has soared to over £9 billion. Shares fell around 2 per cent in London trading on Thursday, following the changes to the board.

Sir Bill's transition from Chief Executive to Chairman is unusual. The UK Corporate Governance Code (most recently updated last year) recommends that a “chief executive should not go on to be chairman of the same company,” advising that should a board decide to do so it must consult major shareholders in advance.

Mr Murray said that the board had overwhelmingly supported Sir Bill's for the role of chairman because of his long experience in the industry and his knowledge and experience in South Asia as well as his experience as chairman of Cairn India.

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