Paperlinx confirms Allen as CEO

Allen, whose appointment was announced with immediate effect on 18 December, has been performing the duties of chief executive on an interim basis since August following the resignation of his predecessor Toby Marchant.

He was previously Paperlinx’s executive vice president for the UK, Ireland and Canada and managing director of Robert Horne.

Allen’s remuneration is fixed at £420,832 per annum which could be increased to £450,774 on 1 July 2013, subject to meeting financial targets. He is also entitled to shares in the company and cash and equity incentives based on performance.

Chairman Michael Barker, who was appointed in October as a replacement for Harry Boon, said: "The board has complete confidence that Mr Allen is the person who can continue this rapid restructuring and return Paperlinx to profitability in the shortest time possible.

"Since [his] appointment as interim chief executive officer, we have identified and are implementing AUS $15m (£9.7m) of cost saving initiatives."

The business underwent a strategic review in 2012, whereby its US and Italian firms were sold and a number of UK sales offices and Delivery Co logistics businesses were closed. However, the restructures in late 2011 and early 2012 were not enough to return the business to profitability, as Paperlinx's 2011/12 financial report revealed an AUS $266m (£172m) loss.

Later in the year, Paperlinx announced that it was to cut 370 jobs across Europe, with 200 UK staff affected.

Most recently, the company proposed plans to centralise its face to market by creating a unified sales structure for its three UK businesses, Robert Horne, Howard Smith Paper Group and PaperCo. The changes are expected to come into effect in the coming months.

Meanwhile, the Netherlands’ Joost Smallenbroek has been promoted to chief financial officer for Paperlinx from his role as corporate finance director for Paperlinx Europe.

Paperlinx said that Smallenbroek’s position in continental Europe will give him good stead to focus on the company’s underperforming businesses in the region.

Speaking about both appointments, Barker said: "These appointments, along with many other restructuring initiatives, place Paperlinx in the best possible position to deal with a difficult market and legacy management issues.

"In particular we are pleased to be promoting experienced executives within the business. The board is delighted with the new structure and quality of the executive team now in place and believes we have an excellent opportunity to restore value in this business.

"It was apparent to the new board almost immediately that in order to turn the company around there had to be a major cultural shift within. A key element of this shift is the complete redesign of the remuneration scheme. Our remuneration system now ensures that shareholder returns are the priority."

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