Departing Davy executives may be asked to sell their 20pc stake
WITH his sudden ascendancy over the weekend to the top job at troubled Davy Stockbrokers, low-key Bernard Byrne now faces the challenge of deciding the immediate future of the tarnished firm.
What he does as interim CEO to steer Ireland’s biggest stockbroker through the maelstrom will be closely watched – not only at home, but abroad too.
With three resignations over the weekend – CEO Brian McKiernan; nonexecutive director and former CEO Kyran McLaughlin; and Davy’s head of bonds, Barry Nangle – Davy has been left reeling.
It will be up to Mr Byrne to pick up the pieces.
With the three exiting executives owning close to 20pc of Davy – Mr McKiernan alone is reckoned to own 13pc – it is also plausible that they may seek or be asked to sell those positions.
While not a short-term issue for Mr Byrne, it is something that will certainly have to be pondered in coming months, either by him if he is confirmed in the CEO role full-time, or failing that, for a new incumbent.
Mr McKiernan’s stake alone is expected to be worth as much as €50m.
That means Mr Byrne (52) would have to come up with a viable financial solution for the firm to acquire the three executives’ holdings, if that is what is ultimately decided.
A private equity backer may be one potential solution. More radical would be an outright sale of the business. While it may be too early yet to predict what will happen, surely this must be one of the possible outcomes.
Realistically, it’s unlikely that a buyer would emerge until the dust has settled – something that could potentially take years given the potential for legal proceedings following from events at the firm.
But from different corporate stock than the veterans who wandered the hallowed halls of Davy’s Dawson Street offices in Dublin, Mr Byrne may be exactly the person who is unafraid to do what many in the firm might have thought unthinkable.
A chartered accountant, Mr Byrne started his career in 1988 at PricewaterhouseCoopers, now known simply as PwC, before leaving to work at ESB International – the utility’s arm that operates overseas.
He stayed there from 1994 to 1998 as financial controller and manger of its asset and project management unit.
Mr Byrne then went to work for IWP, an Irish and then stock market-listed firm that produced and distributed cosmetics, household products and personal care products.
His involvement with the ESB continued, however, being named a non-executive director at the State-owned company in 2001.
As deputy chief executive and finance director at IWP, Mr Byrne headed a group that in 2003 tried to buy the firm. The offer was rejected and Mr Byrne resigned less than a week later.
He subsequently returned to the ESB fold, being named its finance director in 2004.
He would stay there until 2010, when he joined AIB as chief financial officer in the depths of the financial crash.
In 2015, he was named chief executive at the bank, which was by then 71pc-owned by the State.
But his tenure was to be relatively short-lived.
In 2018, he announced his intention to leave AIB, joining Davy in 2019 as the head of its capital markets division, replacing Mr McLaughlin.
Shares in AIB plunged 10pc on the day his departure was announced.
Then AIB chairman Richard Pym commented on Mr Byrne’s departure at the time: “It was a very grim day in my life when Bernard told me that he had an external opportunity which he wanted topursue.”
But the grim days now hang over Davy.
Mr Byrne surely never thought that events at Davy five years before he joined the firm would later come to thrust him into the driving seat at the stockbroker.
Rebuilding the firm’s reputation will be a huge task, especially with politicians baying for blood.
The saga will also likely run for some time if probes and even possibly criminal proceedings are eventually launched.
That could see more of Davy’s linen being washed in public – a prospect that will surely be frightening for the firm.
It seems that the biggest challenges in Mr Byrne’s corporate career may yet lie ahead.
Rebuilding the firm’s reputation will be a huge task