* Standard Life to buy Aberdeen in deal worth 3.8 bln stg
* CEOs Skeoch, Gilbert propose to share role at merged firm
* That draws criticism from some analysts, investors
By Simon Jessop and Carolyn Cohn
LONDON, March 6 Bankers in Britain have a phrase
for chief executives who share control of a company: "co-head,
The use of co-CEOs at major companies has a chequered
history, with personality clashes and governance concerns
meaning the model is rarely used for prolonged periods of time.
Standard Life and Aberdeen Asset Management
are hoping to buck that trend, with respective CEOs Keith Skeoch
and Martin Gilbert planning to share control if an 11 billion
pound ($13.5 billion) tie-up goes through.
But they face scepticism.
Shore Capital analyst Eamonn Flanagan said he had "grave
concerns", citing his negative experience of a similar structure
when insurance firms Royal Insurance and Sun Alliance merged in
1996. The two bosses of the merged firm had both gone within two
years, following culture clashes and poor company performance.
"To us, a single CEO calling the shots and retaining overall
responsibility is critical in all such (merger) transactions ...
we wait to see how the chemistry between Skeoch and Gilbert
develops," Flanagan said in a client note.
The co-CEO model is rare in Britain, with only seven
companies across the FTSE 100 and FTSE 250 using it, data from
corporate governance adviser Manifest shows.
"It's rare but not unknown, and usually it's for a specified
period of time or to cover a particular issue," said Manifest
CEO Sarah Wilson, citing previous power couples at retailer
Sainsbury, real estate investor Hansteen and food supplier
Globally, it's been more common with the likes of Google,
SAP, Oracle and Deutsche Bank all trying it.
At Deutsche Bank, Juergen Fitschen and Anshu Jain ran the
bank together between 2011 and 2015. But their tenure was a
troubled one and the pair abruptly resigned following criticism
from shareholders and regulatory problems.
A co-CEO structure put in place at Barclays' fund arm
Barclays Global Investors in 2002 only lasted three years before
one, Andrew Skirton, left as part of a restructuring.
However, the partnership between Goldman Sachs International
co-heads Michael Sherwood and Richard Gnodde lasted 11 years
before Sherwood's retirement last year and was generally seen as
Gilbert and Skeoch said on Monday their 30-years of
friendship - the pair go fishing together - should help them
find a way of working effectively.
They follow in the footsteps of peers at smaller rivals
Henderson Group and Janus Capital, which agreed
to merge last year and are also planning to split the top job
when their deal goes through.
At the heart of both power-sharing exercises is a concern
that the all-important client assets against which management
fees are charged - a fund firm's chief source of income - could
walk to a rival unless continuity is maintained.
But some analysts and shareholders remain to be convinced.
"We note that this is not a concept that has generally
worked in previous mergers; so the precise areas of
responsibility between the two should certainly be the subject
of questions," said Deutsche Bank analyst Oliver Steel.
Gilbert and Skeoch declined to specify on Monday how their
roles would be organised.
Some analysts suggested it could be a short-term measure,
with both Gilbert and Skeoch in their 60s and nearing retirement
Despite both of Aberdeen's two main shareholders -
Mitsubishi UFJ Trust and Banking and Lloyds Banking
Group - backing the deal, smaller Standard Life
investors spoken to by Reuters were unconvinced.
"It's highly dysfunctional ... for my mind, it doesn't make
for good corporate decision-making," Liontrust fund manager and
Standard Life shareholder Jamie Clark said. "It must be very
difficult for two figures of prominence to share the mantle."
($1 = 0.8146 pounds)
(Additional reporting by Anjuli Davies; Editing by Mark Potter)