Marks & Spencer is refusing to compromise after extensive discussions with shareholders over the elevation of its chief executive, Sir Stuart Rose, to the position of executive chairman.
However, a number of concessions are to be offered in an effort to defuse the row. Chief among these would be to make Sir Stuart face re-election to the board each year at the end of the annual meeting. He will also forego a pay award he was due to receive for becoming chairman. Marks & Spencer is also repeating promises to recruit a new senior independent director with enough experience to satisfy City demands for a counterweight to Sir Stuart in the boardroom.
The retailer provoked a storm of protest last month when it announced that Sir Stuart would become executive chairman from 1 June, until he retired in 2011, in a move that flies in the face of best-practice guidelines set out in the City's Combined Code on corporate governance. Investors had been expecting Sir Stuart to leave next year when his current contract expired.
The concessions were detailed in a letter written to the Association of British Insurers and leaked to a website last night. One M&S source argued that the leak helped to justify the company's decision not to consult with the City over Sir Stuart's elevation initially.
The proposed concession mirrors a move made last year by the telecoms company Cable & Wireless, which put its chairman Richard Lapthorne up for re-election on an annual basis.