The influential shareholder advisory body Pirc has thrown its weight behind the campaign to force Marks & Spencer to find a compromise deal over the executive chairman Sir Stuart Rose's leadership of the high-street bellwether.
Pirc yesterday recommended that shareholders vote to re-elect Sir Stuart, whose dual role is a breach of best-practice corporate governance, but only based on the resolution proposed by the Local Authority Pension Fund Forum. The LAPFF has recommended that the M&S board take all reasonable and practical steps to bring forward the appointment of an independent chairman by July 2010.
Its statement comes ahead of M&S posting its first-quarter results today and its AGM next week. Market consensus forecasts expect M&S to deliver total UK like-for-like sales down by 2.5 per cent for the first quarter, an improvement on the fall of 4.2 per cent in the fourth quarter. Pirc said it would normally oppose the re-election of Sir Stuart, but said the LAPFF resolution provides a "more suitable outlet for shareholders to express their concerns over the combined role". Marks & Spencer, which intends to appoint a new chief executive next year, said: "Both parties want the same end result, Pirc just supports a different view on how we get there – they are entitled to their view."
However, Pirc has lambasted elements of its reward strategy and urged shareholders to vote against the retailer's 2008/09 remuneration report. The body said that while M&S did not pay a bonus to directors last year, they still received share awards with a value at grant of between 200 per cent and 400 per cent of their respective base salaries. Last week, M&S said that Sir Stuart will waive his entitlement to more than £1m of M&S shares in this financial year after opposition from the Association of British Insurers.Reuse content