Melrose co-founder Roper signals exit in aftermath of GKN deal

One of the founders of Melrose Industries will this week signal his intention to step down from the industrial turnaround group in the aftermath of the biggest takeover since it was set up 16 years ago.

Sky News has learnt that Melrose, which paid more than £8bn to buy GKN, the FTSE-100 engineer, will announce that executive vice-chairman David Roper is to retire next year.

The announcement of his intention to leave the company will make Mr Roper the first of Melrose's founding trio to depart, while underlining the continuity of its management team.

Mr Roper, who will turn 70 next year and served as the company's chief executive between 2003 and 2012, presided over a string of successful transformations of industrial groups.

Alongside Christopher Miller and Simon Peckham, he helped Melrose accumulate a devoted following among City investors, with billions of pounds returned to its shareholder base.

The announcement of Mr Roper's plan to retire will come as Melrose holds its annual general meeting, with sources close to the company dismissing as "nonsense" media reports that any of its executive directors were facing significant shareholder opposition.

One insider said on Wednesday night that Mr Miller and his colleagues would be given overwhelming backing, with more than 95% of investors voting in favour of their re-election.

Unrest over executive pay - which has been a focal point of political criticism aimed at Melrose because of the lavish share schemes put in place by the company - is also likely to be relatively muted, with more than 85% of shareholders expected to support its remuneration report.

Sky News revealed last month that the executives who run Melrose saw their pay packages slashed last year in the wake of the company's takeover of GKN.

‎Mr Peckham, chief executive, saw his total remuneration for 2018 fall to £1.05m from more than £42m the year before.

‎His senior colleagues - Mr Miller, Mr Roper and finance chief Geoffrey Martin - were paid a combined £2m last year, down from a staggering £126m in 2017.‎

Melrose pointed out that the disclosures underlined a model for rewarding top executives that resulted in big payouts only when the company's shareholders did well.

‎Under a new long-term incentive scheme that could begin paying out next year, more than £3.1bn of value would need to be created for investors before the plan would crystallise awards for its participants.

‎If it does, they would be in line for tens of millions of pounds more.‎ ‎

Last year, Melrose saw nearly a quarter of investors vote against its remuneration report, while nearly 18% opposed its future pay policy.‎

The company's latest incentive scheme is currently underwater and will not pay out at all unless Melrose's share price rises to over 232p.

‎At Wednesday's stock market close, the shares stood at 189p, following a 19% fall during the last 12 months.

‎Melrose's 'buy, improve, sell' template for struggling industrial businesses has paid dividends for shareholders and executives alike since the company was set up more than a decade ago.

It has sold companies including metering business Elster and Bridon, an industrial cable-maker, during the last few years.‎ ‎‎

However, its £8bn hostile takeover of GKN last year, which was punctuated by a series of Government interventions, catapulted the company and its ‎board to much wider prominence.

In recent weeks, Melrose has defended itself against criticism from MPs over its planned closure of a factory near Birmingham.

‎A Melrose spokesman declined to comment‎‎.