Dearie me! Treasury's new gaffe

David Dearie has left Treasury Wine Estates after a "review". Two days ago, he was up for a bonus.

Something nasty seems to have happened over the weekend.

On Friday afternoon, Treasury Wine Estates (TWE) boss David Dearie licked the last of the envelopes containing the notice of meeting for the upcoming annual event and sent them down to the post office .

Destined to lob into shareholders' letter boxes today, the notice contains the usual humdrum resolutions for approving the accounts and such, until the curious little note called Resolution 7.

That resolution calls for a vote on David's performance rights, indicating that as late as Friday, he was up for a bonus.

According to chairman Paul Rayner, however, it was decided after a review that the company needed a chief executive with greater focus on operational issues rather than marketing.

Dearie won't be around to tune his replacement. He's already left the building. In fact, the search for a replacement has yet to begin, indicating the removal was rather abrupt.

That raises several questions: When was the so called review held? Why was it never announced? And if Dearie's performance was under question, why was he not removed before the notices were sent to shareholders?

Treasury's embarrassing admission in July that it had been forced to tip $35 million of wine down the drain highlighted the ongoing and obvious problems the company still had with its American operations.

Spun out of Foster's two years ago as a demerger, Treasury has suffered from years of under-investment and mismanagement in its American brands.

In fact, the American wine operations nearly sank Foster's. After spending $3.5 billion through the purchase of Berringer Estates and other brands, Foster's was forced to write-off more than $2.7 billion and its attempts at a trade sale failed miserably.

Not surprisingly, this latest development – and the sudden nature of the announcement – has unnerved investors, who quite rightly would be asking: What else awaits them?

Treasury Wine Estate's shares slumped 8.3% this morning to $4.35.

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