The Automobile Association (AA) chairman sacked for launching an assault on a colleague blames a cocktail of alcohol and pills for the attack, adding he should still qualify for payouts close to £70m ($92.9m).
Bob Mackenzie, 64, was dismissed for gross misconduct after throwing punches at the breakdown firm’s 39-year-old insurance chief Michael Lloyd.
The late evening incident happened at the Pennyhill Park Hotel in Surrey on 24 July, where the company’s directors and senior management had gathered for an off-site meeting. The gathering saw deep divisions over strategy erupt.
Friends of Mackenzie have insisted he snapped in a moment of folly as a result of mixing the prescription drug diazepam with two pints of beer and two glasses of white wine.
The two-minute attack on Lloyd was caught on a security camera in the bar of the country hotel. It is understood that Lloyd did not fight back against his boss, opting to absorb the blows and protect his face with hands.
“He doesn’t dispute there was a punch-up. There is a CCTV in the hotel. It was captured on video,” a friend of Mackenzie’s told the Daily Telegraph.
The friend added: “Nobody is saying he didn’t instigate [the attack]. But he was in a bad way.
“He was under a lot of pressure. In the weeks before the attack, [the stress] had been getting to him. He was unwisely taking medication and drinking at the same time. On the night he drank two pints of beer and two glasses of wine.”
Lawyers for Mr Mackenzie have now written to AA board members and directors individually asking for their version of events in the aftermath of the altercation.
His lawyers will argue he was under huge stress, which drove him to behave in the way he did.
Mackenzie’s legal team will say that the chairman should not have been fired and classed as a “bad leaver”, which prevents him cashing in on 33 million performance-related shares he was given when he floated the company on the stock exchange in 2014.
The value of these stock options are estimated to be worth up to £68m. The latest annual report shows Mackenzie was paid £1.36m last year, which included a basic salary of £750,000.
The board was spilt during the summer over early-stage talks with rival UK insurer Hastings to spin-off the breakdown firm insurance unit.
However, Mackenzie’s legal team argue in a letter to the AA that the incident was used by firm’s management as an opportunity to push out its executive chairman, who opposed the Hastings merger.
Mackenzie had argued that the tie-up was a short-term gambit designed to increase payouts to directors and was not in the long-term interests of the whole company, the letter claimed.
At the hotel, management backers of the merger invited bankers from Credit Suisse to present spin-off options without informing Mackenzie — a slight that apparently triggered the altercation in the bar with Lloyd, who is a strong candidate to be made group chief executive when Mackenzie retires.
The AA’s insurance business contributed £76m of the company’s £403m underlying trading earnings last year and is the AA’s second-largest unit, after its breakdown recovery business.
Hastings, a firm with a market capitalisation of £2bn, has pursued an aggressive growth strategy, targeting new customers via price comparison sites. Its share price has jumped from 170p at flotation in 2015 to above 300p.
By contrast the early market euphoria seen after the AA float out of private equity hands has faded, leaving the stock a third below the initial sale price, at around 166p on Wednesday (13 September).
Talks called off
But this week both firms confirmed talks had broken down.
The roadside recovery firm said in a stock market announcement on Tuesday (12 September): “The AA regularly reviews all strategic options, including whether a spin-off of any of its business lines would unlock further value and be in its shareholders’ interests.”
Hastings also confirmed talks took place.
In a statement Hastings said: “The board confirms that the company did have preliminary discussions with the AA regarding a potential partnership with its insurance division, which have ceased.”
Mackenzie’s eldest son, Peter, said in a statement the purpose of the lawyer’s letter to the AA “is to get to the bottom of the detail of Bob’s dismissal”.
It added: “It appears to us that due process was not observed and that there are vitally important consequences and questions to be answered as a result. We make no allegations at this stage but we are determined to get answers to our questions.”
Peter Mackenzie had previously said father had “tendered his resignation… due to acute ill health”.
But a 1 August release to the market from the AA made it clear that it had “removed” its executive chairman “for gross misconduct, with immediate effect”.
A source close to the AA said: “What Bob did was shocking. The board made the difficult decision to do the right thing and to get rid of him.”
The breakdown firm has officially declined to comment beyond its August statement.