BAE Systems said today it had started the search for a new chief executive after Mike Turner announced his intention to step down in the summer.
Mr Turner, who will be 60 next year, has been with the defence company for 42 years, including five-and-a-half years as chief executive.
His departure came as a surprise as Mr Turner told the Sunday Telegraph in June that he was keen to stay on as boss until “at least 65”.
He said at the time: “I think I’m a fairly young guy. I’ve been through some difficult times a few years ago, but the company is in great shape. Why would I want to stop now?”
BAE said today Mr Turner would retire at the end of August 2008 and added it was now in the process of appointing a successor.
Mr Turner oversaw the sale of its stake in Airbus and led the firm’s international expansion, particularly in targeting the higher growth areas of the United States defence market.
Recent acquisitions have included the £2bn (€2.8bn) deal for Armor Holdings, which makes armoured vehicles.
Alongside chairman Dick Olver, Mr Turner has dealt with the company’s response to corruption allegations relating to Britain’s biggest arms export deal, known as al-Yamamah, which dates back to the 1980s.
Although the UK’s Serious Fraud Office dropped an investigation, BAE faces an ongoing inquiry by the US Department of Justice. BAE has denied any wrong-doing.
With 96,000 employees worldwide, BAE’s achieved sales of £13.7bn (€19bn) and profits of more than £1bn (€1.4bn) last year.
Mr Turner said: “I am pleased to be leaving a great company in such excellent financial shape and with a strong forward strategy and robust business plan.”
Meanwhile, it emerged that Mr Turner could leave the group with a cash and shares deal worth £2.36m (€3.6m) if targets are met, such as an “orderly handover of key external relationships and facilitating an orderly succession to the chief executive role”.