Investors back Argos's pounds 540,000 man

Institutional investors in Argos, the besieged retailer, yesterday applauded the appointment of Stuart Rose as acting chief executive and said his pounds 540,000 pay package was "miraculously low".

Mr Rose will receive the money - an annual salary of pounds 320,000, a supplement of pounds 40,000 and a joining fee of pounds 180,000 - even if Argos capitulates to the pounds 1.6bn hostile bid from Great Universal Stores.

One fund manager said: "I think it is quite modest. He could have negotiated for more." Another referred to Mr Rose's pay deal as "miraculously low given the circumstances".

Another referred to comments that Mr Rose would only have to add 0.2p to the Argos share price to cover his remuneration. "I think he probably will deliver an increase in shareholder value and so the deal will not look excessive. If he gets you the extra cash then it is not too outrageous. He has to lead the defence and possibly run the company."

Institutions said Argos had done the right thing by bringing in an experienced retailer to defend against the bid. Chief executive Mike Smith is seriously ill.

One said: "This is a plus for Argos and a minus for GUS on the present terms. The board has acted sensibly because they would have been fighting the bid with one arm tied behind their back without a full-time chief executive."

Institutions said Mr Rose was a good choice and highly regarded, even though he had had a low profile when he was a director at Burton Group until his departure in July.

GUS's cash offer is pitched at 570p per share, compared to a closing Argos price of 626p, unchanged yesterday. Mr Rose spent yesterday seeing institutions and in meetings with Schroders, the group's adviser.