The Bank of Queensland Ltd (ASX: BOQ) share price outperformed for much of Tuesday before slipping into the red amid the company's annual general meeting (AGM).
And the major topic of conversation? The surprise exit of the bank's former CEO and managing director George Frazis. The company announced its board determined Frazis would walk last week.
In a speech published to the ASX, chair Patrick Allaway admitted the leadership change "would have come as a surprise to many", continuing:
I want to explain the board's decision directly to you.
The Bank of Queensland share price reached a high of $7.24 today, making a 0.82% gain. Unfortunately, that didn't last.
Right now, the Bank of Queensland share price is $7.17, 0.14% lower than yesterday's close.
For comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.11% at the time of writing. Meanwhile, the S&P/ASX 200 Financials Index (ASX: XFJ) has slumped 0.31%.
Let's take a closer look at the latest from the ASX 200 regional bank.
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Ousting CEO in Bank of Queensland's 'best interest'
The Bank of Queensland share price is holding this afternoon. It comes amid news the company's recently ousted CEO was made aware of its board's desire for a leadership overhaul. Allaway commented in today's ASX release:
While we respect and acknowledge the contribution that George Frazis has made over his three years with BOQ, the board reached a conclusion that we need a different capability and leadership style to build a simpler and more resilient bank.
Our expectations, in respect of this, were made clear to George over a period of time.
We recognise the immediate departure of a CEO and the associated uncertainty is not ideal, but we felt a longer transition would not be in the best interest of BOQ.
He said it would have been "sub-optimal and destabilising" if Frazis was to stay in the top job amid the search for his successor "knowing he did not have the ongoing support of the board".
The move was a bid for broader stability, said Allaway. It's hoped it will allow senior executives to focus on the bank's plan, support the wider team, and prioritise customers and shareholders.
Allaway stepped up to the role of executive chair and Karen Penrose to lead independent director as the bank works to find a new CEO. Allaway said:
I recognise the increased time commitment required to undertake an executive chair role, and accordingly I have taken leave of absence from the Dexus Property Group (ASX: DXS) and Allianz boards during this interim period.
Chair addresses Bank of Queensland share price disappointment
Allaway also addressed investors' likely disappointment in the Bank of Queensland share price's performance. The stock has fallen 13% year to date and 5% over the last 12 months.
The new chair said:
We are trading at a discount to book value and a relatively low price to earnings multiple. In our view, the value of our quality book and the material investment being made in our transformation is not currently reflected in the share price.
The completion of our transformation will require a medium term, rather than short term, view of benefits and we thank our shareholders for their support over this time horizon.
The chair also recognised the importance of dividends to those invested in Bank of Queensland shares. He said management "will balance that against the resilience and strength of the bank, capital requirements for balance sheet growth, and ongoing investments for transformation."
