WH Smith tries to head off revolt with plan to replace Handover
Monday 26 January 2004
WH Smith, the embattled newsagents group, is hoping that a pledge to quickly replace its chairman, Richard Handover, will avert a shareholder revolt at this week's annual meeting.
The retailer, out of investor favour after a string of profits warnings, is promising shareholders that Mr Handover will step down before the end of his one-year fixed contract next January. The company says he will go as soon as a successor is found.
Mr Handover, 57, has borne the brunt of City ire at WH Smith because his six-year tenure as chief executive has left the company struggling to justify its place on Britain's high streets. He was succeeded as chief executive in November by Kate Swann of Argos, and defied the Higgs code of corporate governance by moving up to replace Martin Taylor as chairman.
An early departure could mean that Mr Handover, who receives an annual salary of £465,000, is entitled to a hefty compensation payment.
Shareholders will vent their frustration at the company at Thursday's annual meeting, with many expected to either abstain or vote against its remuneration report - an issue because of the size of the "golden hello" awarded to Ms Swann. The National Association of Pension Funds has criticised the remuneration policy, arguing that it is "insufficiently tied to performance criteria".
Investors will criticise the company for its handling of the departure of Beverley Hodson, the former managing director of its retail chain who was sacked earlier this month.
However, shareholders are ultimately expected to back the remuneration report. Hermes, its third-biggest shareholder, is among those understood to have backed off after the group promised to step up its search for Mr Handover's successor.
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