Tom McKillop
Encyclopedia
Sir Thomas Fulton Wilson McKillop, born 19 March 1943, is a chemist
, pharmaceutical company CEO and former chairman of RBS Group.
McKillop was born in Dreghorn
, a small village near the town of Irvine
in Ayrshire
, Scotland
and educated at Irvine Royal Academy
and then Glasgow University
, where he took a BSc Hons and PhD in Chemistry. He joined ICI's
Corporate Research Laboratory at Runcorn
in 1969 after post-doctoral research work in Paris. He moved to ICI Pharmaceuticals Division in 1975 and, having held a number of positions in Research, in 1989 he was appointed Technical Director of ICI Pharmaceuticals with international responsibility for research, development and production.
, and in 1994 he was appointed Chief Executive Officer of the new company. In April 1999, Zeneca merged with Astra to form AstraZeneca
PLC and McKillop became Chief Executive of the merged company. He retired early from AstraZeneca
on the 1st January 2006, when David Brennan took over the role of AstraZeneca
CEO. After leaving AstraZeneca he became the chairman of the Royal Bank of Scotland.
, who promoted aggressive expansion of the bank by acquiring other banks. From the time that Goodwin took over as chief executive until 2007, RBS's assets quadrupled, its cost-to-income ratio improved markedly, and its profits soared. In 2006 pre-tax profits climbed 16% to £9.2 billion with most of the growth coming from its investment banking
business. By 2008 RBS was the fifth-largest bank in the world by market capitalization. One of the factors in its rise was its enthusiasm for supporting leveraged buyouts. In 2008 it lent $9.3bn, more than double its nearest rival.
However, following investor unrest in the build-up to RBS's acquisition of a $1.6bn minority stake in Bank of China
in 2005 Goodwin was criticised by some RBS shareholders for putting global expansion ahead of short-term financial returns. Between 2002 and 2005 the share price plateaud at around £17 per share, having nearly trebled between February 2000 and May 2002. Goodwin was accused of megalomania
by some shareholders, as reported by Dresdner Kleinwort
analyst James Eden (who said he thought the label was 'unwarranted'). After the Bank of China deal, he was forced to promise RBS shareholders he would not indulge in any further big acquisitions and focus instead on growing the group organically.
However, in early 2007 Dutch bank ABN Amro
was under pressure from hedge fund
s, including Chris Hohn of the hedge fund TCI
, to break itself up in order to maximise shareholder value. ABN chief executive Rijkman Groenink suspected RBS of acting in concert with the hedge fund Tosca, which was chaired by former RBS Chairman Mathewson and recommended the takeover bid of an RBS consortium, against the proposed merger with Barclays Bank. Goodwin arranged a consortium of RBS, Fortis
and former RBS shareholders Grupo Santander
, to purchase the assets of ABN Amro and break them up in a three-way split. According to the proposed deal, RBS would take over ABN's Chicago operations, LaSalle Bank
, and ABN's wholesale operations; while Santander would take the Brazilian operations and Fortis the Dutch operations. In a manoeuvre "labelled in all quarters as a poison pill
" ABN Amro agreed to sell key RBS target LaSalle to Bank of America
for $21bn, but in July 2007 the consortium offered the same $98bn for ABN's remaining assets, with a higher cash component (93%). The deal was struck in October 2007 as the global liquidity crisis began to develop, with Barclays withdrawing its EUR61bn bid and ABN's shareholders endorsing the EUR71bn RBS takeover. Coming after the nationalisation of Northern Rock
due to the freezing of the wholesale money markets, the deal proved the final straw for RBS, as it severely weakened its balance sheet not only through the size of the acquisition but due to ABN Amro's substantial exposure to the US subprime mortgage crisis
.
While at the Royal Bank of Scotland
the value of Royal Bank of Scotland shares fell below a quarter of their level in early 2007. Following criticism from the press for the takeover of ABN AMRO
and the UK government having to bail out the bank, Tom McKillop announced his early retirement as Chairman of the Royal Bank of Scotland
on 13 October 2008. At a meeting of the Treasury Select Committee of the House of Commons on February 10, 2009, he admitted to having no qualifications in banking. Like the other retired bankers present, he also apologised for the financial crisis.
, having been a non-executive director
of Lloyds TSB
Group plc from 1999-2004.
He is also Chairman of the British Pharma Group, Pro-Chancellor of the University of Leicester
, Vice-President of the European Federation of Pharmaceutical Industries and Associations
and Chairman of the North West Science Council. He was awarded the Society of Chemical Industry
's annual Centenary Medal in 2005. In January 2007 he took up the post of President of the Science Council
. His brother, Alexander (Sandy) McKillop, was Professor of Organic Chemistry at the University of East Anglia
from 1970 to 1996.
Chemist
A chemist is a scientist trained in the study of chemistry. Chemists study the composition of matter and its properties such as density and acidity. Chemists carefully describe the properties they study in terms of quantities, with detail on the level of molecules and their component atoms...
, pharmaceutical company CEO and former chairman of RBS Group.
Dreghorn
Dreghorn is a village near Irvine, North Ayrshire, Scotland. This parish comprehends the old parishes of Dreghorn and Pearston, which were united in 1668. The whole of the parish was historically the property of the De Morvilles, who were Constables of Scotland and Lords of Cunninghame...
, a small village near the town of Irvine
Irvine, North Ayrshire
Irvine is a new town on the coast of the Firth of Clyde in North Ayrshire, Scotland. According to 2007 population estimates, the town is home to 39,527 inhabitants, making it the biggest settlement in North Ayrshire....
in Ayrshire
Ayrshire
Ayrshire is a registration county, and former administrative county in south-west Scotland, United Kingdom, located on the shores of the Firth of Clyde. Its principal towns include Ayr, Kilmarnock and Irvine. The town of Troon on the coast has hosted the British Open Golf Championship twice in the...
, Scotland
Scotland
Scotland is a country that is part of the United Kingdom. Occupying the northern third of the island of Great Britain, it shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the...
and educated at Irvine Royal Academy
Irvine Royal Academy
Irvine Royal Academy is a six-year non-denominational secondary school in Kilwinning Road, Irvine, North Ayrshire, Scotland.-History:In 1572, King James VI provided funds to found the King's School of Irvine at Kirkgatehead...
and then Glasgow University
University of Glasgow
The University of Glasgow is the fourth-oldest university in the English-speaking world and one of Scotland's four ancient universities. Located in Glasgow, the university was founded in 1451 and is presently one of seventeen British higher education institutions ranked amongst the top 100 of the...
, where he took a BSc Hons and PhD in Chemistry. He joined ICI's
Imperial Chemical Industries
Imperial Chemical Industries was a British chemical company, taken over by AkzoNobel, a Dutch conglomerate, one of the largest chemical producers in the world. In its heyday, ICI was the largest manufacturing company in the British Empire, and commonly regarded as a "bellwether of the British...
Corporate Research Laboratory at Runcorn
Runcorn
Runcorn is an industrial town and cargo port within the borough of Halton in the ceremonial county of Cheshire, England. In 2009, its population was estimated to be 61,500. The town is on the southern bank of the River Mersey where the estuary narrows to form Runcorn Gap. Directly to the north...
in 1969 after post-doctoral research work in Paris. He moved to ICI Pharmaceuticals Division in 1975 and, having held a number of positions in Research, in 1989 he was appointed Technical Director of ICI Pharmaceuticals with international responsibility for research, development and production.
Zeneca
In 1993, ICI Pharmaceuticals demerged to become ZenecaZeneca
Zeneca Group PLC was a multinational pharmaceutical company headquartered in London, United Kingdom. Zeneca was formed in June 1993 by the demerger of the pharmaceuticals and agrochemicals businesses of Imperial Chemical Industries into a separate company listed on the London Stock Exchange.In 1999...
, and in 1994 he was appointed Chief Executive Officer of the new company. In April 1999, Zeneca merged with Astra to form AstraZeneca
AstraZeneca
AstraZeneca plc is a global pharmaceutical and biologics company headquartered in London, United Kingdom. It is the world's seventh-largest pharmaceutical company measured by revenues and has operations in over 100 countries...
PLC and McKillop became Chief Executive of the merged company. He retired early from AstraZeneca
AstraZeneca
AstraZeneca plc is a global pharmaceutical and biologics company headquartered in London, United Kingdom. It is the world's seventh-largest pharmaceutical company measured by revenues and has operations in over 100 countries...
on the 1st January 2006, when David Brennan took over the role of AstraZeneca
AstraZeneca
AstraZeneca plc is a global pharmaceutical and biologics company headquartered in London, United Kingdom. It is the world's seventh-largest pharmaceutical company measured by revenues and has operations in over 100 countries...
CEO. After leaving AstraZeneca he became the chairman of the Royal Bank of Scotland.
RBS
He chaired RBS during the tenure of CEO Fred GoodwinFred Goodwin
Sir Frederick Anderson Goodwin CA, FCIBS is a Scottish chartered accountant and former banker who was chief executive of the Royal Bank of Scotland Group between 2001 and 2009....
, who promoted aggressive expansion of the bank by acquiring other banks. From the time that Goodwin took over as chief executive until 2007, RBS's assets quadrupled, its cost-to-income ratio improved markedly, and its profits soared. In 2006 pre-tax profits climbed 16% to £9.2 billion with most of the growth coming from its investment banking
Investment banking
An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities...
business. By 2008 RBS was the fifth-largest bank in the world by market capitalization. One of the factors in its rise was its enthusiasm for supporting leveraged buyouts. In 2008 it lent $9.3bn, more than double its nearest rival.
However, following investor unrest in the build-up to RBS's acquisition of a $1.6bn minority stake in Bank of China
Bank of China
Bank of China Limited is one of the big four state-owned commercial banks of the People's Republic of China. It was founded in 1912 by the Government of the Republic of China, to replace the Government Bank of Imperial China. It is the oldest bank in China...
in 2005 Goodwin was criticised by some RBS shareholders for putting global expansion ahead of short-term financial returns. Between 2002 and 2005 the share price plateaud at around £17 per share, having nearly trebled between February 2000 and May 2002. Goodwin was accused of megalomania
Megalomania
Megalomania is a psycho-pathological condition characterized by delusional fantasies of power, relevance, or omnipotence. 'Megalomania is characterized by an inflated sense of self-esteem and overestimation by persons of their powers and beliefs'...
by some shareholders, as reported by Dresdner Kleinwort
Dresdner Kleinwort
Dresdner Kleinwort was a British-based investment bank: it disappeared as a brand from the world of investment banking in September 2009, when its remaining businesses adopted the Commerzbank branding.-History:...
analyst James Eden (who said he thought the label was 'unwarranted'). After the Bank of China deal, he was forced to promise RBS shareholders he would not indulge in any further big acquisitions and focus instead on growing the group organically.
However, in early 2007 Dutch bank ABN Amro
ABN AMRO
ABN AMRO Bank N.V. is a Dutch state-owned bank with headquarters in Amsterdam. It was re-established, in its current form, in 2009 following the acquisition and break up of ABN AMRO Group by a banking consortium consisting of Royal Bank of Scotland Group, Santander and Fortis...
was under pressure from hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
s, including Chris Hohn of the hedge fund TCI
The Children's Investment Fund
The Children’s Investment Fund Management LLP is a London‐based hedge fund founded by Chris Hohn in 2003 which manages The Children’s Investment Master Fund. TCI makes long‐term investments in companies globally...
, to break itself up in order to maximise shareholder value. ABN chief executive Rijkman Groenink suspected RBS of acting in concert with the hedge fund Tosca, which was chaired by former RBS Chairman Mathewson and recommended the takeover bid of an RBS consortium, against the proposed merger with Barclays Bank. Goodwin arranged a consortium of RBS, Fortis
Fortis (finance)
Fortis N.V./S.A. was a company active in insurance, banking and investment management. In 2007 it was the 20th largest business in the world by revenue but after encountering severe problems in the financial crisis of 2008, most of the company was sold in parts, with only insurance activities...
and former RBS shareholders Grupo Santander
Grupo Santander
The Santander Group is a banking group centered on Banco Santander, S.A., the largest bank in the Eurozone and one of the largest banks in the world in terms of market capitalisation. According to Forbes Magazine Global 2000, it is the 13th largest public company in the world...
, to purchase the assets of ABN Amro and break them up in a three-way split. According to the proposed deal, RBS would take over ABN's Chicago operations, LaSalle Bank
LaSalle Bank
LaSalle Bank Corporation was the holding company for LaSalle Bank N.A. and LaSalle Bank Midwest N.A. . With $116 billion in assets, it was headquartered at 135 South LaSalle Street in Chicago, Illinois...
, and ABN's wholesale operations; while Santander would take the Brazilian operations and Fortis the Dutch operations. In a manoeuvre "labelled in all quarters as a poison pill
Poison pill
A shareholder rights plan, colloquially known as a "poison pill", or simply "the pill" is a type of defensive tactic used by a corporation's board of directors against a takeover...
" ABN Amro agreed to sell key RBS target LaSalle to Bank of America
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
for $21bn, but in July 2007 the consortium offered the same $98bn for ABN's remaining assets, with a higher cash component (93%). The deal was struck in October 2007 as the global liquidity crisis began to develop, with Barclays withdrawing its EUR61bn bid and ABN's shareholders endorsing the EUR71bn RBS takeover. Coming after the nationalisation of Northern Rock
Northern Rock
Northern Rock plc is a British bank, best known for becoming the first bank in 150 years to suffer a bank run after having had to approach the Bank of England for a loan facility, to replace money market funding, during the credit crisis in 2007. Having failed to find a commercial buyer for...
due to the freezing of the wholesale money markets, the deal proved the final straw for RBS, as it severely weakened its balance sheet not only through the size of the acquisition but due to ABN Amro's substantial exposure to the US subprime mortgage crisis
Subprime mortgage crisis
The U.S. subprime mortgage crisis was one of the first indicators of the late-2000s financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages....
.
While at the Royal Bank of Scotland
Royal Bank of Scotland
The Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
the value of Royal Bank of Scotland shares fell below a quarter of their level in early 2007. Following criticism from the press for the takeover of ABN AMRO
ABN AMRO
ABN AMRO Bank N.V. is a Dutch state-owned bank with headquarters in Amsterdam. It was re-established, in its current form, in 2009 following the acquisition and break up of ABN AMRO Group by a banking consortium consisting of Royal Bank of Scotland Group, Santander and Fortis...
and the UK government having to bail out the bank, Tom McKillop announced his early retirement as Chairman of the Royal Bank of Scotland
Royal Bank of Scotland
The Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
on 13 October 2008. At a meeting of the Treasury Select Committee of the House of Commons on February 10, 2009, he admitted to having no qualifications in banking. Like the other retired bankers present, he also apologised for the financial crisis.
Other
He currently remains a non-executive director of BPBP
BP p.l.c. is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas "supermajors"...
, having been a non-executive director
Non-executive director
A non-executive director or outside director is a member of the board of directors of a company who does not form part of the executive management team. He or she is not an employee of the company or affiliated with it in any other way...
of Lloyds TSB
Lloyds TSB
Lloyds TSB Bank Plc is a retail bank in the United Kingdom. It was established in 1995 by the merger of Lloyds Bank, established in Birmingham, England in 1765 and traditionally considered one of the Big Four clearing banks, with the TSB Group which traces its origins to 1810...
Group plc from 1999-2004.
He is also Chairman of the British Pharma Group, Pro-Chancellor of the University of Leicester
University of Leicester
The University of Leicester is a research-led university based in Leicester, England. The main campus is a mile south of the city centre, adjacent to Victoria Park and Wyggeston and Queen Elizabeth I College....
, Vice-President of the European Federation of Pharmaceutical Industries and Associations
European Federation of Pharmaceutical Industries and Associations
European Federation of Pharmaceutical Industries and Associations is a Brussels-based trade union founded in 1978 representing the research-based pharmaceutical industry operating in Europe....
and Chairman of the North West Science Council. He was awarded the Society of Chemical Industry
Society of Chemical Industry
The Society of Chemical Industry is a learned society set up in 1881 "to further the application of chemistry and related sciences for the public benefit". Its purpose is "Promoting the commercial application of science for the benefit of society". Its first president was Henry Enfield Roscoe and...
's annual Centenary Medal in 2005. In January 2007 he took up the post of President of the Science Council
Science Council
The was established by Royal Charter in 2003. The principal activity of The Science Council is the promotion of the advancement and dissemination of knowledge of and education in science pure and applied, for the public benefit....
. His brother, Alexander (Sandy) McKillop, was Professor of Organic Chemistry at the University of East Anglia
University of East Anglia
The University of East Anglia is a public research university based in Norwich, United Kingdom. It was established in 1963, and is a founder-member of the 1994 Group of research-intensive universities.-History:...
from 1970 to 1996.
See also
- Fred GoodwinFred GoodwinSir Frederick Anderson Goodwin CA, FCIBS is a Scottish chartered accountant and former banker who was chief executive of the Royal Bank of Scotland Group between 2001 and 2009....
- Andy HornbyAndy HornbyAndy Hornby is an English businessman, notable for having been the Group Chief Executive of HBOS at the time of its government-facilitated rescue by Lloyds TSB...
- James Crosby (banker)
- 2008 United Kingdom bank rescue package2008 United Kingdom bank rescue packageA bank rescue package totalling some £500 billion was announced by the British government on 8 October 2008, as a response to the ongoing global financial crisis. After two unsteady weeks at the end of September, the first week of October had seen major falls in the stock market and severe worries...