Rose believes activists will fail to deliver
MARKS & SPENCER believes shareholder activists will not get the required 75 per cent vote in favour of a resolution at its AGM on Wednesday calling on the retailer to split the executive chairman role held by Sir Stuart Rose.
The Local Authority Pension Fund Forum (LAPFF), has filed a resolution for Wednesday’s shareholder meeting calling on M&S to appoint an independent chairman by July 2010.
However the resolution will need a 75 per cent vote in favour of the resolution for it to be enforced. Anything below will be considered as merely advisory by the retailer. A spokesman for M&S yesterday told City PM “If it misses the target, it misses the target, it will remain advisory.”
The shareholder body in recent weeks has ramped up support from influential activist groups Risk Metrics and PIRC. The Association of British Insurers has issued an amber-topped alert on its report on the company, due to the controversy over corporate governance.
PIRC said: “Combining the two roles in one person represents a dangerous concentration of power that is potentially detrimental to board balance, effective debate, and board appraisal.”
The group is bracing itself for a wave of protests with half of its shareholder body expected to vote in favour of the resolution. But the bellwether retailer is explicit about repelling its rebel investors.
A spokesman for the company said yesterday: “Both the company and the shareholders want to get to the same place of split roles, but there’s a debate about the route.”
M&S argues that the current 2011 date for Rose to step down “provides ample time jointly to develop internal candidates and evaluate the external market.”
Rose last week waived his entitlement to more than £1m in shares in a bid to appease shareholders.
The retailer also hopes to pacify some shareholders with its latest sales figures showing a marked improvement in the first quarter. Like-for-like sales in the UK dropped 1.4 per cent in the 13 weeks to 27 June, bettering the previous quarter as well as forecasts in the City.