Marks & Spencer suffered one of the biggest shareholder rebellions in its 125-year history yesterday after hordes of investors voted against its succession plan and the re-election of the executive chairman Sir Stuart Rose at the annual meeting in London.
More than 40 per cent of shareholders, including abstentions, supported the Local Authority Pension Fund Forum's (LAPFF) resolution that urged M&S to appoint a new chairman by the end of July 2010. This succession timetable is at odds with M&S's intention to find a chief executive to replace Sir Stuart next year and then an independent chairman the year after.
On a more light-hearted note, the AGM was the usual jamboree of Sir Stuart charming private shareholders and bizarre questions ranging from criticism of lavatories at its store in Weston-super-Mare and how some women can't find blue shoes in stores.
Some 36.18 per cent voted for the LAPFF resolution, 4.11 per cent abstained and 59.72 per cent rejected it as M&S recommended. Following the vote, Ian Greenwood, the LAPFF's chairman, said the vote was a "significant day for shareholder engagement2. He added: "The LAPFF are looking forward to an immediate dialogue with the company about how it plans to respond."
While M&S's investors defeated the LAPFF's resolution, the rebellion is the latest in a series faced by other UK companies this year, including at the annual meetings of the oil company Royal Dutch Shell and the fashion retailer Next. Sir Stuart also had a day to forget after 21.51 per cent of shareholders, including abstentions, refused to back his re-election to the board. While 78.49 per cent voted in favour, 7.4 per cent voted against and 14.11 per cent of votes were withheld, Sir Stuart was comfortably re-elected.
On succession and his dual role, Sir Stuart said: "We recognise that our current board structure is out of line with the [corporate governance] code. We just have a different view [to the LAPFF] as to how we get there." Ahead of the vote, Mr Greenwood described the dual-role as "like having an auditor and finance director having the same role", and warned that "whatever happens [with the vote], we are not going away".
Sir David Michels, the deputy chairman of M&S who wants to run the company, was also bruised by nearly 14 per cent of shareholders voting against his re-election, perhaps in protest at the stuttering progress of the succession plan that he is in charge of. Furthermore, 14.71 per cent of shareholders refused to back the retailer's remuneration report.
Sir Stuart said while shareholders were "disappointed", he had received letters of support over the retailer's decision to cut its final dividend by a third in 2008-09, following its pre-tax profits tumbling by 40 per cent to £604m. After the meeting, shareholders came out in support of Sir Stuart. Mike Hart, 60, said: "I thought the [LAPFF] resolution was ill-proposed. In the current climate, it would be wrong to rush the succession when are not out of the recession." Marion Meagher, a retired former employee, said: "I think the City has got it in for Sir Stuart. He is a damn sight better than Luc Van de Velde [the former chairman], but he was nicer looking."
Revolting: Pay packages incur investors' anger
* Bellway Homes promised to review its policy on directors' pay when shareholders voted against the housebuilder's remuneration report in January, after the ABI published a "red-top alert" over Bellway's plan to award directors large bonuses.
* About 37.6 per cent of BP investors opposed the oil major's executive pay plan in April. Its chairman also came under fire for being a non-executive director of Royal Bank of Scotland.
* More than 35 per cent of investors at Home Retail Group, the owner of Argos, voted last week against its new bonus scheme, which would see some managers paid up to 150 per cent of their salaries in cash.
* Shell's executive pay plan was rejected by investors at the oil company's annual meeting in May.Reuse content