Dec 17, 2013

The curse of the celebrity CEO: QBE’s O’Halloran joins the list

Celebrity CEOs get their names in the paper and their bank accounts in the black -- but their effect on their companies' share price is not so rosy. QBE's Frank O’Halloran is the latest example.

Adam Schwab — Business director and commentator

Adam Schwab

Business director and commentator

The curse of the celebrity CEO strikes again. The latest to have his once marvellous reputation tarnished is former QBE boss Frank O’Halloran, after the insurer announced last week a third write-down in the space of a year, this time for $600 million, largely in relation to its beleaguered United States business. It was O’Halloran who, to great acclaim, spurred between 70 and 140 acquisitions during his time heading the insurer, which caused the recent calamities.

O’Halloran was well rewarded for his efforts. Since 2002, he was paid $58 million by QBE shareholders. This appeared to be a good idea at the time, with QBE’s share price rocketing from $6 (in the aftermath of September 11) to $35. It’s not looking so smart now, as QBE’s share price languishes at $10.82 per share (and still trades at a sky-high earnings multiple). As Crikey warned back in 2012, QBE’s highly risky Australian mortgage lending business is yet to blow up, which may cause further pain for long-suffering shareholders.

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One thought on “The curse of the celebrity CEO: QBE’s O’Halloran joins the list

  1. Rodney Adler

    I read with great interest your article on Frank O’Halloran and although I may agree in general that there is a curse surrounding celebrity CEOs I feel that your article does Mr O’Halloran a great disservice. I had a great deal to do with Frank for many years and I have not spoken to him for at least half a decade but I can tell you from personal experience and general reading that Frank never courted publicity, could not be considered a celebrity CEO and would be considered one of the more polite, humble Chief Executive’s of significantly important companies that Australia has produced.
    I readily accept that the results of QBE are concerning and as a long tail underwriter a lot of problems relate to many past years but it is tiresome that long after a Chief Executive retires and many decisions taken that affect past and present years that accusations must be levelled against a person who carried out his responsibilities as Chief Executive particularly well and under his stewardship the company reached heights never envisaged prior to his original appointment. It is also very galling to me that you compare him to individuals that are inappropriate trying to create an image by association which is unfair and derogatory to his name and past and current position

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