The board of Londis yesterday pledged to abandon a controversial options scheme that would have given four executives a £21m windfall if the convenience store group was sold.
The company, which is being stalked by several rival retailers including Ireland's Musgrave and the Big Food Group, also promised to involve shareholders in the independent review of its future being undertaken by KPMG.
While Londis stopped short of caving in to demands that the group's independent directors be removed, the shareholders did claim one non-executive scalp after Alan Heasman agreed to step down after it emerged that he failed to fulfil the criteria for the job.
Speaking after a heated three-hour annual meeting in south-west London, Londis's chairman, Peter Williams, said store owners would "absolutely definitely" fare better once the accountancy firm had drawn up a new options scheme. He admitted the company had mishandled "communication with shareholders" about the existing scheme, put in place just weeks before the board began talks with Musgrave. The old terms would have entitled four executives to 51 per cent of the group's value in the event of a sale, leaving just £10,000 for each individual shopkeeper. "The option-holding directors have agreed to be flexible and negotiate until we get a solution that satisfies everyone," Mr Williams added. Mr Williams and Graham White, the chief executive, promised to stand down if shareholders were unhappy with the outcome of KPMG's review, which will also look into the role of the independent directors. However, the moves failed to pacify most of the 90 Londis investors at yesterday's meeting. "Justice is the last hiding place of the scoundrel," said Andrew Hadley, who owns two Londis shops in Norfolk. "The problems can only be resolved by the non-executives standing down." He called for the new option package to be "considerably fairer than feeding from the trough of our sweat".
Shamus Lehal, a Bedfordshire store owner, said: "We've got the wrong people running the show. We are just ignorant peasants [compared with them] because that's the way they choose to play it."
Raj Chandegra, a Londis retailer who is leading an action group against the current board, said calling an extraordinary meeting to try to force the resignation of the non-executives was still "in the back of our minds".
Describing the independent directors as a "busted flush", fellow action group member Adrian Costain, said: "Clearly the corporate governance process has broken down due to the lack of rotation of the non-executives."
Shareholders vented their wrath at the independent directors by delivering a significant protest vote against their remuneration packages. One in four of the chain's 1,993 shareholders voted not to approve their pay packets, while just under a quarter also voted against their re-election.
The resignation of Mr Heasman, who sold his Londis shop 18 months ago, was hailed as a symbolic victory by shareholders after the non-executive director lost the support of the individual storekeeper who he represented on the board.
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