Embattled Pearson boss to stand down

THE boss of Pearson is leaving after announcing the sale of the publisher’s stake in Penguin random House.

John Fallon ( pictured), who has run the company since 2012, is retiring to make way for a successor with ‘fresh perspective’, following a period of major changes.

Under the 57- year- old, Pearson shed media businesses such as the Financial Times, The Economist and Penguin to focus more on its digital and education products.

But during that time the firm also slashed jobs, suffered weak performance in its US textbooks arm and saw its shares nearly halve in value.

Fallon has also been criticised for a slow pace of change.

Yesterday he announced the firm was selling its remaining 25pc stake in Penguin random House for £530m to Germany’s Bertelsmann. Pearson and Bertelsmann brought Penguin and random House together in 2013 and have co-owned it until now. The deal severs Pearson’s 50-year relationship with much-loved Penguin books, founded by Britain’s allen Lane in 1935. Fallon, who has been paid £11.3m over the past seven years, said he would leave next year after his replacement had been chosen. In an email sent to staff, he said: ‘Together, we have navigated through a period of significant change, transforming Pearson from a media conglomerate to a singlefocused learning company.’

His exit caps a difficult year. Pearson issued a profit warning recently, and the company’s shares slumped by almost 20pc in a single day in September after it warned of ‘weaker than expected’ sales in the US higher education division, which still makes up a quarter of its revenues.

It said the disappointing performance meant annual profit was now set to come in at around £590m, down from an initial target of £640m.

David Madden, an analyst at CMC Markets, said: ‘The publishing industry has had to adapt to changing consumer habits, and that’s why Pearson is focusing on digital learning, but it is a slow process.

‘John Fallon, who hatched the reorganisation, is stepping down. Given the share price’s poor performance in recent years, few investors will be sad to see him go.’

Shares rose 1.7pc, or 11p, to 655p.