FirstGroup has bowed to shareholder pressure by appointing the former chief executive of rival Arriva as chairman of the troubled rail and bus operator.
David Martin, who had been proposed as director as part of a boardroom coup by FirstGroup’s biggest investor, Coast Capital Management, will take over with immediate effect, the company said on Thursday.
He replaces Wolfhart Hauser, who stepped down after almost a third of shareholders voted against him at a general meeting in June convened at the request of Coast.
Two more directors subsequently stepped down at the end of July after investors revolted in a separate vote at FirstGroup’s annual general meeting.
The Investor Forum, an influential group of heavyweight financial institutions, has piled further pressure on the FTSE 250 company in recent weeks.
The forum, which spearheaded a successful revolt against Unilever’s bid to move its headquarters out of the UK last year, wrote to FirstGroup to raise dissatisfaction over the pace of change under the current management, The Telegraph understands.
Mr Martin was among a number of directors initially proposed by Coast in June as it sought to oust half of the company’s board. He dropped out of the running prior to the vote, however.
Tensions have run high between FirstGroup and its biggest investors for more than a year after the company rejected a takeover attempt from US private equity firm Apollo. Shareholders want the company to offload its struggling Greyhound bus network in the US and many believe it should stop operating trains in the UK.
Greyhound and FirstGroup’s UK bus network was formally put up for sale in May.
Earlier this week a consortium led by FirstGroup won a 10-year contract to run Britain’s most profitable rail line, the West Coast Mainline, as well as services on the fledgling High Speed 2 line. FirstGroup and Italian firm Trenitalia will take over from Virgin Trains in December, ending Sir Richard Branson’s long association with the railways in the UK.
Coast, which had proposed former transport minister Steven Norris as chairman, said it was “delighted” at the decision to appoint Mr Martin, whom it called "one of the most accomplished leaders in the surface transport industry".
"His appointment marks, clearly, much needed change, and the beginning of a new and productive chapter in the company’s history, as mandated by investors," it added.
“There remains however much more to be done - we look forward to the remaining three vacant board seats also being filled by individuals who enjoy investors’ support, and who hold the requisite skillsets.”
Mr Martin is credited with transforming Arriva between 2006 and 2016, overseeing a number of acquisitions and the sale to German transport giant Deutsche Bahn.
He said: “Undoubtedly there are challenges which we must overcome, but I am confident in the opportunity that exists to unlock the considerable value.”
The Investor Forum declined to comment.