Shareholders deliver a fresh blow to M&S boss

Jul 10 2008 by Peter McCusker, The Journal

MORE than one in five Marks & Spencer shareholders refused to back the controversial dual role of boss Sir Stuart Rose. Around 22% of investors either abstained or voted against his reappointment as executive chairman, which combines the role of chairman and chief executive.

The post has been criticised by many of M&S’s major institutional shareholders as being in breach of corporate governance best practice.

The vote – at the company’s annual general meeting in London yesterday – comes in the wake of a shock profits warning last week, which saw M&S’s shares slump by a third in value.

He was backed in his executive chairman role by independent deputy chairman Sir David Michels, who said Sir Stuart had the right set of skills to take M&S forward. “In these somewhat uncertain economic times, continuity becomes more important,” he said.

Sir David added: “The decision to retain Sir Stuart was taken after careful deliberation. There has been much comment and some criticism over the combined role of chief executive and chairman. While we are sensitive to this criticism, myself and the board are entirely and unanimously convinced that this route is the right one for your company.”

But some shareholders were not so impressed, including Peter Hampshire, 73, from Richmond, south west London. His main concern was the dual role: “It is a question of balance - you need two strong people at the top. It’s best practice to split the roles.”

M&S said investors holding 51.6% of shares voted on the reappointment of Sir Stuart – which equates to approximately 815 million shares.

Of those, 140.1 million were withheld and of the remainder nearly 6% – around 40 million shares – voted against.

This means that around 180 million failed to back the reappointment – approximately 22% of those shareholders who voted.

On a similar basis, around 16% failed to back the company’s remuneration report.

You need two strong people at the top. It’s best practice to split the roles