Taylor Wimpey has appointed an internal candidate as its new chief executive, in a move likely to anger Elliott Advisors, the activist investor that was pressuring the housebuilder to appoint someone from outside the company.
The appointment of Jennie Daly marks a milestone in the male-dominated industry as Taylor Wimpey becomes the first UK housebuilder to appoint a female chief executive and only the third company in the FTSE 100 to have a female CEO and a female chair.
Daly, who is group operations director, will take over from Pete Redfern, who has led the business for 15 years since it became the UK’s third biggest housebuilder through the merger of Taylor Woodrow and George Wimpey in 2007. She will be paid a basic salary of £750,000, and receive pension contributions of £75,000. She will also be eligible for a bonus of up to £1.12m and shares in the company worth up to £1.5m, dependant on performance.
The chair, Irene Dormer, said Daly’s skills “set her apart from the other candidates we were considering”.
However, the move is likely to spark a backlash from Elliott, which in December revealed it was one of the company’s top five investors and went public with demands including finding a new chief executive.
In a nine-page public letter to Dorner, it said shareholders were “unlikely to support a chief executive candidate that represents an extension of the status quo at Taylor Wimpey”.
“The successor must represent a clean break with the current management team,” Elliott wrote. “While there are talented members of the Taylor Wimpey team, any current leader would represent a continuation of the status quo, and have shared in the loss of trust and credibility with investors.”
Elliott reportedly considered the Crest Nicholson chief, Peter Truscott, the former Persimmon boss, Dave Jenkinson, or the Barratt deputy chief executive, Steven Boyes, as its preferred candidates.
A spokeswoman for Taylor Wimpey said on Monday: “We engaged with all major shareholders on the succession process, including Elliott.”
In a statement Elliott said it was pleased to see progress on management change at the company, and said it would continue to engage over the appointment of two new non-executive directors to offer support to the new chief executive.
“As one of Taylor Wimpey’s largest investors, Elliott has been pleased to see progress on management and board change following our recent dialogue with the company, including the departure of the incumbent chief executive,” said a spokeswoman for Eliiott.
“Following today’s appointment of Jennie Daly as the new CEO, we expect to see Taylor Wimpey take the necessary steps to deliver improved value for shareholders and to correct the deep share-price underperformance that has persisted in recent years.”
She added: “Critical to this process will be the appointment of new non-executive directors, and Elliott remains engaged with Taylor Wimpey regarding the identification of candidates who would add relevant experience and operational expertise to the company’s board.”
Elliott has a reputation for aggressively picking battles at its restructuring targets, which have included the Argentina government, the mining company BHP, GSK and Telecom Italia.
“Jennie has extensive experience in the housebuilding sector and has demonstrated exceptional leadership and a razor-sharp operational focus,” Dorner said. “Her strong focus on execution, combined with her customer and people-focused skills, set her apart from the other candidates we were considering.”
Daly, who joined Taylor Wimpey from Redrow in 2014, will officially take over as chief executive at the company’s annual meeting on 26 April.
In the first half of 2021, the UK’s third-largest housebuilder finished a record number of homes, returned to profit and upgraded forecasts for the full year, the results for which it will publish in March.
Analysts said Elliott was attracted to Taylor Wimpey because of Britain’s housing shortage and the firm’s hidden potential, including its land bank, but some believed it needed to improve its operational performance. Its shares have fallen by a quarter since February 2020.