Some 4.9 per cent of voting shareholders were against Sir Stuart's re-election as a director, but 17.2 per cent, primarily institutional investors, withheld their vote. Nearly 13 per cent, counting abstentions, voted against the remuneration report.
The protest vote is significant because typically 98 per cent of shareholders vote in favour of a director's re-election, and a 17 per cent abstention vote is substantial.
Alan MacDougall, the managing director of the corporate governance body Pirc, said the vote demonstrated the "depth of investor unease". He said: "This vote is a clear signal from M&S shareholders that they have serious reservations about the company's decision to ignore well-established best practice. We urge the company to revert to separated chair and chief executive roles as soon as is practicable."
While Sir Stuart did not receive a bloody nose from shareholders, a large percentage of whom are pensioners, a number of investors expressed their anger at his dual role of chairman and chief executive, the company's share buy-back programme, its slumping share price, last week's profit warning and even the decision to charge for plastic bags. Alexander Spiers, a 76-year-old from Surrey, said: "They should have stopped the share buy-back earlier. They have been doing it with a falling share price. They are taking shareholders' money and throwing it away."
City analysts played down the immediate significance of the protest vote but said Sir Stuart may come under increased pressure over the next 12 months – unless he improves the weak areas of its business.
Matthew McEachran, an analyst at Kaupthing, said: "If they have not been seen to tackle head-on some of the available opportunities and been innovative in terms of protecting themselves from the recession over the next 12 months, then perhaps he will come under more pressure."
Shore Capital's John Stevenson agreed. In particular, he said that if Sir Stuart does not improve the performance of M&S's struggling food business, which accounts for about half of UK sales, then the negative commentary the retail giant has suffered over the past few months would resurface.
"The biggest issue is the food business. It really comes down to the speed at which he can deliver and communicate the strategy of the food business," Mr Stevenson said. More specifically, Mr Stevenson said M&S's food business has been struggling in areas such as product availability, pricing, promotions and innovation.
Mr Stevenson added: "He still maintains that the company's problems are largely market-driven, but for food it is more self-inflicted."
At the AGM, Sir Stuart reaffirmed his commitment to turn around the food business, after the company posted a 4.5 per cent fall in like-for-like food sales last week. M&S also parted company last week with its food director Steve Esom, who was promoted to the board only four months ago. However, Sir Stuart said M&S had already "seen a change of pace" under Mr Esom's successor John Dixon, who took control of food last week.
Sir Stuart promised "more of the same" in general merchandise, where volume sales have continued to grow, and said the breadth of its pricing in clothing would shelter it from the worst of the downturn. "I believe we are in good shape," Sir Stuart said.
Sir Stuart also acknowledged shareholder concerns over his dual role, speculation about a scaling back of the dividend and share buy-back. He said while these issues were at the forefront of board members' minds there would be no change to its previously stated strategy.
M&S shares closed up 2.5p at 234p.
Rose faces the wrath of investors
* Sir Stuart Rose: "I firmly believe M&S will still be on the high street in 100 years' time. It is bigger than any individual and it is certainly bigger than me."
* Sir Stuart commenting on press coverage over the past few weeks: "I have been called the Robert Mugabe of retail, a kitten strangler, having the hide of an armadillo, and today I have been [accused] of being Gordon Brown and on that I have no comment."
* "I take corporate governance very seriously and I very much regret the negative publicity it has attracted."
* Referring to the downturn, Sir Stuart said: "It [M&S] is like... a kitchen smoke detector in your kitchen. Customers are telling us their purses are being stretched."
* One M&S shareholder, Patricia Young, from Kent, said: "The financial climate at the moment is very difficult and that is reflected in the share price, and all the other retailers have had some problems."
* Another, Edna Brown, 74, from north London, said: "I do not buy their food because it is too expensive. I shop at Sainsbury's and we have now got a Lidl in my area."
* Alexander Spiers, 76, from Surrey, another shareholder, said: "I am not taken by the dual role, but I don't think there is anyone else who could do a better job. We need someone like Stuart who has spent half his life in the business."
* M&S deputy chairman, Sir David Michels, on Sir Stuart's elevation: "We took hopefully the right, but certainly the more difficult, decision. We are convinced history will show we made the right decision."
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