Dr Michael Smurfit will step down as chief executive of Jefferson Smurfit on October 31st, the packaging group said last night. He will stay on as chairman.
In a major restructuring of one the State's largest companies, Smurit said its board had nominated chief operations officer Mr Gary McGann as chief executive designate. The announcement was made at Dr Smurfit's annual chairman's dinner.
His son, Mr Tony Smurfit, has been appointed president and chief operating officer designate, a clear sign the family will not lose its influence at the highest levels of the organisation.
Mr Tony Smurfit previously worked as chief executive of the group's operations in France. Aged 65 this year, Dr Smurfit faced a barrage of criticism at the company's last a.g.m. over his remuneration package, which was worth €6.6 million in 2000 and was revealed for the first time under new rules on notifcation to shareholders of directors' remuneration.
The firm maintained the salary - one of the State's highest - was paid on merit.
Three Irish institutions voted or abstained on some resolutions in protest at Dr Smurfit's package at last years annual meeting. They were: Aberdeen, Irish Life and AIB Investment managers.
Smurfit's latest annual report also showed his brothers and co-directors, Mr Dermot Smurfit and Mr Alan Smurfit, were paid more than Mr McGann even though they answered to him.
In a statement issued after 10 p.m. last night, Dr Smurfit said he would remain a significant shareholder in the group.
He added: "My primary interest is, and will continue to be, the group. I felt that now was the optimal time to announce my decision to step down."
Dr Smurfit joined his father's company in 1952 and was appointed joint managing director of the Jefferson Smurfit Group in 1966. In 1977, he was appointed as chairman and chief executive officer. A former chief executive at Aer Lingus, Mr McGann joined Smurfit in 1998 as chief financial officer and was appointed chief operating officer in January 2000.
Recent market speculation has centred on the possibility that Smurfit Group might merge with its 29 per cent owned US partner, Smurfit Stone. The comany's stock closed yesterday at €2.50, up three and not far from its 12-month high of €2.61.
