Charman: Ouster as Axis chairman was ‘act of monumental betrayal’

  • John Charman: Pictured in his early days of leading Axis Capital

    John Charman: Pictured in his early days of leading Axis Capital

John Charman has recently described his ousting as chairman of Axis Capital Holdings Ltd as “an act of monumental betrayal”.

In an interview with The Royal Gazette, Mr Charman said his controversial exit from the company that he founded after the 9/11 terrorist attacks in 2001, and which he then developed into one of the leading global specialty insurance and reinsurance companies with shareholders’ equity of around $6 billion, had left him feeling devastated and very angry.

Mr Charman voluntarily stepped down after nearly 11 years as chief executive in May of this year, making way for Albert Benchimol, the chief financial officer, whom Mr Charman said he had recruited as his successor.

At the same time, Mr Charman was appointed to the post of executive chairman replacing his long-standing business partner and friend Michael Butt. Just a few weeks later, on June 25, Axis announced that Mr Charman had been dismissed “without cause” owing to “differences with Mr Charman over his understanding of the role and responsibilities of the chairman position”. Mr Butt returned to the chairman’s role.

Mr Charman strenuously denied that was the case, he said that his future role was clearly understood and actively encouraged by the whole board. The board required an executive chairman role as Mr Benchimol’s career background had been in finance and he had little underwriting experience, Mr Charman added.

His executive role was also clearly described in the Axis company press releases at the time, Mr Charman said. In the press release announcing Mr Charman’s switch to to executive chairman role, dated December 2011, Mr Charman was quoted as saying: “I plan to remain active in my new role as chairman of the board and will work closely with Albert and the board to ensure a smooth leadership transition.”

Mr Charman said the “behind-the-scenes boardroom coup” occurred in mid to late May when he was in a Swiss medical clinic for two weeks. He added: “Never truer was the expression, when the cat’s away the mice will play!”

Mr Charman described Axis as “the heart and soul of my life”. He was adamant that three senior directors whom he had previously counted as close friends were responsible for his removal.

“One of them had been my closest friend and colleague for over 10 years, yet within weeks he had turned into my greatest betrayer,” he said.

Mr Charman is no longer involved with Axis. However, he and his family remain the largest individual shareholders in Axis with around a five percent stake in the company.

“It is safe to assume that my family and I will not support the re-election of any of the existing directors,” he said. “I have, throughout my 42-year career, supported and practised strong, honest and transparent corporate governance.

“However, after these despicable events , I fear for the future of Axis, especially its wonderful staff and shareholders.”

The termination of Mr Charman’s contract cost Axis around $36 million. He said: “This is not about money, this is about what is right or wrong and what is in the best interests of the shareholders. This action was absolutely not!”

Lawyers have advised him that the restrictive covenants within his contract do not apply because he was terminated without cause, thereby allowing him to re-enter the industry next year which he intends to do.

“If the company were to pursue legal action against me then, I will welcome it as I will then finally be given the full opportunity to publically expose the very shabby and inappropriate way that my termination took place,” Mr Charman added.

Axis had no comment on the matter yesterday to add to what the company has already said in public releases.

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