Peter Davis, who was ousted as chairman of J Sainsbury yesterday, has got the luxury yacht, the country pile and the KBE - but his latest hoped-for trophy, a multimillion-pound bonus, may yet be snatched from his grasp.
Shareholders are furious that Sir Peter is in line for a £2.4m payout after a dismal year's trading. Even more infuriating for the company's owners is that the chairman is determined to hang on to his last big pay cheque, even though profits are down and sales are stalling.
The City, hardly unfamiliar with big pay cheques, is disgusted by the size of Sir Peter's bonus, comparing the payout to the avarice of Napoleon, the pig in George Orwell's Animal Farm who lived in luxury as the rest of the farmyard animals strove in poverty.
Defenders of Sir Peter, who was not talking to reporters yesterday, say his payout was agreed by the company's remuneration committee and passed at the annual meeting. They say it is hardly surprising that attempts to negotiate a settlement have broken down, claiming Sir Peter has been treated appallingly by the company. But as well as a worsening performance at Sainsbury's, which has been surpassed by Tesco and Asda in the supermarket stakes, his intransigence over money has helped bring him down.
Richard Ratner, a retail analyst at stockbrokers Seymour Pierce, said: "Sir Peter Davis has stepped down as chairman of Sainsbury's following pressure from shareholders over his £2.4m bonus payment at a time when profitability declined from £640m to £616m.
"Moreover, apart from £100,000 to Roger Matthews [Sainsbury's finance director] no one else in management received a bonus. This must have done wonders for management morale in the company. It was almost like Animal Farm when the goodies went to Napoleon and the other animals got nothing."
The row over Sir Peter's 2003 bonus and his compensation package for being forced out a year ahead of schedule is now in the hands of lawyers and it has all the ingredients that could make it a long and bitter court wrangle. Whatever the outcome, the fact is that yesterday's announcement of Sir Peter's demise was an ignoble end to a career that has seen him collect all the trappings of wealth.
From modest beginnings in Liverpool, Sir Peter worked his way up to become a captain of industry and a patron of the arts.
He is a director of the Royal Opera House in Covent Garden and is a former chief executive of Prudential and Reed Elsevier, the publishers.
His office in Sainsbury's glass fronted headquarters in Holborn Circus, London, is decorated with pictures of his 59ft yacht which he moors in exotic locations such as the Bahamas.
As well as a house in London, Sir Peter bought a farmhouse in the Cotswolds earlier this year for £3m where he has settled into the rural life, a familiar figure enjoying a pint in his local, the King's Head, where Kate Winslet, the actress, is a neighbour.
Sir Peter was looking forward to another year as chairman of Sainsbury's until this latest row broke out. But despite his progress and comfortable lifestyle Sir Peter, unlike a number of his peers in British business, has never been in a position to take advantage of the vast wealth on offer in the private equity world.
Many leading businessmen have given up jobs leading public companies to then front deals backed by private equity funds that have brought them vast fortunes.
Others, such as Stuart Rose the new Marks & Spencer chief executive, have got lucky by holding millions of share options over cheap shares that they have cashed in when their companies have been taken over. Mr Rose enjoyed a £20m windfall when Arcadia, the retail chain, was bought by Philip Green.
Sir Peter himself sold Homebase, the DIY chain that Sainsbury's used to own, to private equity funds in a deal that netted the Homebase management a £40m profit pool to share.
Instead, Sir Peter has worked his way up in business, including a 10-year stint at Sainsbury's in the 1980s when he reached the level of managing director. Passed over for the top job, he left to run Reed Elsevier, the publishing group, where he sold off the Daily Mirror to focus the burgeoning on business publishing.
He was then appointed chief executive of Prudential, a mighty financial institution that brought with it huge influence and power. He starred in the Prudential's own adverts as the self styled "Man from the Pru" but he could not resist the call from the Sainsbury family in March 2000 to come back and run their business.
Although his first two years were successful and Sainsbury's shares hit record highs, the past two years have been beset by problems. He brought in Jamie Oliver, the celebrity chef, to bolster sales via advertisements but the company has suffered at the hands of Tesco, Asda and Waitrose.
Sir Peter invested heavily in a new distribution system for the company with hi-tech, state of the art depots dotted around the country.
But yesterday the reality was revealed by Justin King, the company's new chief executive, who took over from Sir Peter when he was elevated to chairman earlier this year.
"The reality is the depots are not functioning at the level they should," said Mr King. He warned that profits for the current year would be "significantly below market forecasts" sending the company's shares down nearly 6 per cent after the announcement.
Sir Peter's demise was confirmed after a board meeting on Wednesday afternoon at which Sir Peter faced the rest of the Sainsbury's board for more than two hours.
On the agenda was the shock profits warning that Mr King was preparing to spring on shareholders.
But of equally pressing concern was the shareholder revolt that had been brewing ever since it was revealed that Sir Peter was in line for a £2.4m bonus for 2003. The row was set to erupt in public at Sainsbury's annual meeting on 14 July and the rest of the board, led by Lord Levene, the senior non-executive director, wanted to find ways of defusing the problem. Lord Levene had been trying to broker a peace deal with shareholders who wanted Sir Peter to waive some of the bonus and give some to charity. But though the company sympathised with shareholders, Sir Peter refused to budge. The stand-off could have only one outcome.
"Both the business and Sir Peter took the decision that it was in the business's best interests for him to step down immediately," said Mr King yesterday.
In a separate statement, the company said: "In discussion with Sir Peter Davis about possible amendments to his share award, details of which were disclosed in the 2004 report and accounts, it was not possible to reach an agreement. It was mutually decided that this matter would be referred to legal representatives of both parties as part of his termination arrangements."
Sir Peter's tenure at Sainsbury's was also marred by the furore over the appointment of Sir Ian Prosser as his successor as chairman of the company. The handover was planned so that Sir Peter could step down in the summer of next year. The board had hired headhunters who came up with name of Sir Ian, a former chairman of Six Continents, the hotels and pubs group once known as Bass.
But Sir Peter and his board had failed to consult shareholders over the move. When the announcement came that Sir Ian would be the next chairman of Sainsbury's, there was an outcry among shareholders who had never taken a shine to Sir Ian during his time at Six Continents.
They found him arrogant and difficult to deal with, the last person they wanted as the chairman of Sainsbury, a company that was already suffering problems with trading.
In finally ousting Sir Peter yesterday, however, the board had done its homework and had seen leading shareholders about getting a replacement.
Their conversations included the blind trust run by Judith Portrait which controls the Sainsbury shareholding still owned by the founding family, which includes David Sainsbury, the Science minister.
The board presented a new chairman to the shareholders in the form of Philip Hampton, a former group finance director of LloydsTSB and BT Group who is also undertaking the Hampton Review for the Treasury. The shareholders, including the Sainsbury family's blind trust, were ready to accept Sir Peter's head and replace him as chairman with Mr Hampton.
Sir Peter's legacy at Sainsbury will emerge in the next few months but the early omens are not good. The supermarket chain is now embarked on a root and branch review of the business. One item on the agenda which will be of particular concern to the Sainsbury family is the question of the company's dividend.
Historically, the group has been one of the better payers on the stock market in terms of dividends and the family has received millions every year. But Sainsbury's yesterday admitted that the dividend policy would also be included in the business review.
The clear threat is that the annual payout may be at risk as the company's earnings growth comes under more and more pressure.
If that happens, then Sainsbury's, once Britain's foremost supermarket chain, could become a bid target. Like other retailing giants such as Marks & Spencer and Safeway, Sainsbury's may find itself presented with a takeover offer it finds difficult to refuse.
In that case, the role of the Sainsbury family will prove crucial. With so much of the company under its control - the family owns more than 20 per cent of the business - what it decides will be central to the business's fate.
Analysts believe that a bid is a possibility, although, at the moment, a remote one. Sir Peter's immediate legacy is unlikely to be a sale of the company but rather a wholesale reorganisation of the firm.
Meanwhile the wrangle over his final payoff will continue.Reuse content