UK’s AA Plc Fires Executive Chairman Mackenzie for `Gross Misconduct’

The AA Plc removed executive chairman and director Bob Mackenzie from the company with immediate effect for “gross misconduct.”

John Leach will replace Mackenzie as chairman, the firm said in a statement on Tuesday. Simon Breakwell, who joined the AA as a non-executive director in 2014 and set up Uber.com’s European operations, has been appointed as acting chief executive officer. Mackenzie was fired for a personal conduct matter, a spokesman for the firm said without elaborating.

Shares in the company, which provides breakdown cover for motorists and insurance, fell as much as 13 percent after the announcement, the most in more than a year.

The firm’s financial performance in the first six months has been negatively impacted by “erratic work load patterns” while the cost base is inherently fixed, AA said in the statement. That was especially true in June and July when demand rose. The AA also incurred a one-off cost relating to a profit-sharing agreement with a third party for certain products including breakdown repair cover.

The company has also seen significant growth in the number of insurance policies underwritten by the firm’s own business on behalf of its broker. That means the revenue is recognized over the life of the policy, impacting profits in the year in which it’s written.

The board had already begun the process of splitting the combined role of executive chairman at the company, according to the statement.