IAN Russell, the ScottishPower chief executive who presided over the utility giant's recent bloody boardroom cull, was yesterday suddenly removed and replaced by the heavyweight former head of Allied Domecq, Philip Bowman.

However, Russell remains poised to walk away with a golden goodbye worth more than GBP5m - in spite of a career at the power giant chequered with the failed acquisitions of Southern Water and PacifiCorp in the US.

Shareholders have been disappointed with Russell's performance for some time. He presided over a hefty cut in ScottishPower's dividend in the wake of the Southern Water disposal in 2002, and critics lay the blame squarely on Russell's shoulders for squandering a opportunity to close the deal with Germany's E.ON last year.

ScottishPower attracted the takeover interest after it sold PacifiCorp to a unit of Warren Buffett's Berkshire Hathaway for just over dollars-9bn - although it bought the business for about dollars-10bn in 1999, when Russell was the utility's finance director.

While ScottishPower yesterday claimed that Russell was leaving by "mutual consent" and denied that he was sacked, it is otherwise highly irregular for a company to award its departing chief executive a severance package.

Moreover, at the end of November, ScottishPower chairman Charles Miller Smith explicitly gave his backing to Russell after four key executives were jettisoned as part of a wider plan to save GBP60m a year.

"The chief executive is doing an excellent job and the board are extraordinarily supportive of him, " Miller Smith said at the time.

Nonetheless, Miller Smith was understood to have enlisted the services of a headhunter in October to seek a replacement for Russell - during the time when Scotland's largest industrial company was locked in negotiations with its German nemesis.

Russell, who will be 53 this month and is on a rolling yearto-year contract at the UK's fifth-largest energy supplier, will receive a severance package worth about GBP2m, which takes in an annual salary of more than GBP700,000, plus longterm incentive pay-offs and a pension pot. However, he will also be given the right to cash in GBP3m worth of share options.

The City welcomed the change of the guard and ScottishPower's share price surged 16p to 559p.

News of Russell's departure also brought renewed bid speculation that Bowman, might yet steer ScottishPower towards a deal with Powergenowner E.ON - given the exAllied Domecq chief's merger experience.

While Australian-born Bowman has not previously been a director of a utility, he negotiated Allied through a GBP7.6bn takeover by Pernod Ricard last year. Moreover, Russell led ScottishPower's rejection of E.ON's GBP10.7bn takeover proposal in November.

ScottishPower said yesterday Bowman would take charge of the company's helm on Monday when Russell departs.

UBS said in a note that the move was a "surprise in our view. Russell's removal is likely to enhance speculation that the company is to be acquired as it removes perceived potential opposition to acceptance of a future offer".

Most analysts yesterday were divided over whether Bowman's appointment made a deal with E.ON, or another party, more likely.

"There's bound to be some read across, " said one analyst. "Russell led the opposition to E.ON, while Bowman sold the last business he was boss of."

However, other analysts questioned why ScottishPower would recruit such a highprofile executive, and why Bowman would accept the job, if the company was simply gearing itself up for sale.

Angelos Anastasiou, an analyst at Williams de Broe, said: "I think it is bolstering management, rather than bringing somebody in who's going to say yes to a bid.

"Ian Russell spearheaded the acquisitions that have subsequently proved to be failures."

E.ON walked away from ScottishPower in November, barring the German firm under UK takeover rules from making a fresh approach for six months.

However, Paul Golby, E.ON UK's chief executive, left the door open for a fresh takeover attempt in a newspaper interview at the weekend. "Who knows what will happen in six months' time. The ambition to grow hasn't gone away, " he said.

ScottishPower declined to say how much Bowman would be paid as its new chief executive.

Neither Russell nor Bowman could be reached for comment yesterday.

However, a spokesman for Bowman said: "He will be driving forward shareholder value."

Asked if Bowman cared to express a view on the performance of his predecessor, the spokesman added: "Nope."

CHANGE OF GUARD

PHILIP BOWMAN

CHIEF executive of FTSE-100 high-flier Allied Domecq until six months ago, Bowman led the group into a takeover by French giant Pernod Ricard for GBP7.6bn.

He joined Allied in 1998 as finance director and became chief executive in 1999. Bowman, 53, is regarded as one of the drinks industry's most successful brand developers.

Earlier this week, he was appointed to the board of Scottish & Newcastle and prior to yesterday's ScottishPower announcement he was hotly tipped as the replacement for Sir Brian Stewart, S&N's chairman.

Bowman, whose grandfather was a Scot, was born in Melbourne, Australia. However, he was educated in the UK.

He trained initially in medicine and computer sciences and practised medical research before embarking on a career in business.

Before Allied, he had a 10-year career with Bass Group.

ScottishPower said his appointment would bring a "fresh perspective".

Bowman is also a member of the Keepers of the Quaich, an exclusive nonprofit making society, with membership by invitation only, for people with a "positive record of association with Scotch whisky".

IAN RUSSELL

A SECRETIVE chief executive, Russell has often proved to be a step ahead of the game - particularly during the so-called day of the long knives, in which four key executives were culled, including possible successors.

He is regarded as a man who keeps his cards close to his chest.

Russell joined Glasgow-headquartered ScottishPower in 1994 and was appointed chief executive in April 2001.

He played a critical role in the ill-fated acquisitions of Southern Water in England and PacifiCorp in the US and their subsequent losses when sold.

Nonetheless, Russell has taken ScottishPower's customer base to more than five million and recently led the firm's rejection of a GBP10.7bn takeover proposal from Powergen-owner E.ON.

Shareholders have been highly critical of his performance.

However, Charles Miller Smith, the Unilever veteran who chairs ScottishPower, described Russell's 11-year performance at the company as "significant".

"The group is in robust health, the sale of PacifiCorp is proceeding on schedule and the group is on track to deliver strong results for the full year, " Miller Smith said.

It was unclear yesterday what Russell's next move will be - if any.