What you need to know about the top executives of building materials group CRH PLC (UK) (LON: CRH).
Management can make all the difference to a company's success and thus its share price.
The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.
In this series, I'm assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today I am looking at CRH (LSE: CRH) (NYSE: CRH.US), the Irish building materials group with an international footprint.
Here are the key directors:
|Nicky Hartery||(non-exec) Chairman|
|Myles Lee||Chief Executive|
|Maeve Carton||Finance Director|
|Albert Manifold||Chief Operating Officer|
|Mark Towe||CEO, Oldcastle (Americas)|
With a market cap of £10bn CRH is Ireland's largest company, and seven of its 12 directors are Irish.
Nicky Hartery became chairman last year after eight years on the board, following the footsteps of a predecessor who had similarly been recruited from the ranks of non-execs. He was formerly Vice President for manufacturing and business operations for PC-maker Dell's EMEA region, and earlier worked in the US as President and CEO of Verbatim.
From FD to CEO
Qualified as both a civil engineer and a chartered accountant, Myles Lee joined CRH in 1982 and undertook finance roles, rising to be finance director in 2003. He has thus been involved in much of CRH's overseas expansion through a multitude of small and medium sized acquisitions.
Mr Lee continued this strategy after stepping up to be CEO in January 2009. He has run the group during a difficult time for the construction market in Europe and the US, overseeing Ireland's largest ever rights issue in 2010. He plans to retire at the end of this year.
Maeve Carton is one of just six female finance directors on the FTSE 100. A qualified accountant, she joined the firm in 1988 and rose through the finance ranks to become finance director in 2010.
Also an accountant in a company known for strong financial discipline, Albert Manifold joined CRH in 1998 after a spell working in private equity. He has undertaken divisional finance director and divisional management roles, and assumed the role of chief operating officer when the role was created in 2009 to reflect CRH's increasing complexity. Mr Manifold is seen as the most likely candidate to take over from Mr Lee.
A US citizen, Mark Towe joined the group in 1997 and rose to assume responsibility for Oldcastle, the group's holding company for the Americas, in 2008.
CRH's non-execs have a broad spread of international commercial backgrounds.
I analyse management teams from five different angles to help work out a verdict. Here's my assessment:
|1. Reputation. Management CVs and track record.|
|2. Performance. Success at the company.|
Good during difficult time.
|3. Board Composition. Skills, experience, balance|
Long-serving executives, recruitment from within.
|4. Remuneration. Fairness of pay, link to performance.|
|5. Directors’ Holdings, compared to their pay.|
Execs holdings range from £6m to £0.5m.
Overall, CRH scores 17 out of 25, good result. With all the executives having at least 16 years service with the company and a tradition of recruiting CEOs from within (and chairman from the board), there's unlikely to be any great changes when Mr Lee retires. The preponderance of accountants underlines the group's conservative management.
I've collated all my FTSE 100 boardroom verdicts on this summary page.
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> Tony does not own any shares mentioned in this article.