Mr Tony Shanahan has resigned as deputy chief executive of First Active, the troubled mortgage lender. Mr Shanahan (42) stepped down from the board with immediate effect yesterday and will give up his post as deputy chief executive at the end of the month. He is to receive a compensation package in excess of £250,000. Last night First Active shares fell 5 cents in Dublin to a new low of €1.75.
The departure of Mr Shanahan had been expected and is seen as a consequence of the management shake-up that saw the departure of Mr John Smyth as chief executive at the start of February. It followed a series of setbacks for the company which converted from a building society 14 months earlier. The shares are trading at a substantial discount to their flotation price of €2.86 per share.
Mr Smyth promoted Mr Shanahan to deputy chief executive from deputy group general manager last November in a move that was intended to improve investor confidence in the group. Mr John Callaghan, the chairman of the bank is currently acting as chief executive and is actively seeking a permanent replacement for Mr Smyth. Mr Shanahan was not considered a likely successor.
Yesterday Mr Callaghan said: "Mr Shanahan was influential in a number of successful strategic initiatives in First Active. On behalf of the board, I would like to take this opportunity to thank Mr Shanahan for his contribution and to wish him every success in the future."
A spokeswoman for the bank said that Mr Shanahan had received a compensation package in line with the terms of his employment. Mr Shanahan's contract allows for one year's notice and it is understood that he is receiving the equivalent of one year's salary plus pension, bonus and other remuneration. The value of the package is between £250,000 and £300,000.
Mr Shanahan also received generous share options in the company at the time of its flotation. He was given an option over 250,000 shares exercisable at the flotation price of €2.86, considerably above the current share price. Such options normally lapse in the event of an executive's departure but the board of directors has the option to honour them.
A chartered accountant and qualified solicitor Mr Shanahan joined the First National Buildings Society, as First Active was then known, in 1990 as general manager - finance. Prior to joining the building society, he was a general manager with ABN International Financial Services. He was appointed an executive director in 1992 and became deputy group managing director in 1995.
