Protest over M&S chief’s dual role
LONDON, July 24 (Reuters) – Controversy over Stuart Rose’s combined role as chairman and chief executive at Marks & Spencer looks set to persist, after a major investor group unveiled plans for a protest at next year’s shareholder meeting.
The Local Authority Pension Fund Forum (LAPFF), which represents 48 local government funds with 95 billion pounds ($190 billion)in assets, said on Thursday it planned to file a resolution calling for an independent chairman if the retailer has not split the roles by the time of the shareholder meeting.
Rose survived one of the biggest shareholder rebellions of recent years earlier this month, when 22 percent of investors abstained or voted against his election as executive chairman at this year’s annual general meeting (AGM).
“As a representative body of large institutional investors in Marks & Spencer, the Forum believes that the risk of the company continuing downhill from its current shaky position has been increased as a result of the combined roles,” LAPFF Chair Ian Greenwood said in a statement.
Marks & Spencer (M&S), Britain’s biggest clothing retailer, issued a surprise profit warning this month, reporting a fall in like-for-like sales in both its general merchandise and food businesses.
“We believe that concerned shareholders have no alternative but to continue to push for the combined roles to be separated,” Greenwood said.
He estimated that the LAPFF accounted for towards 2 percent of M&S’s issued share capital.
A shareholder needs to have the support of investors owning 5 percent of a company’s issued share capital, or the support of 100 shareholders with an average holding of at least 100 pounds of shares each, to be able to table a resolution at an AGM according to corporate governance consultancy PIRC.
Britain’s corporate governance guidelines recommend that companies should split the roles of chairman and chief executive, or have a good explanation if they do not.
M&S said it had explained its reasons for Rose’s appointment and declined further comment.
At 1245 GMT, M&S shares were down 4 percent at 259 pence, compared with a 1.2 percent fall on the DJ Stoxx European retail index. That valued the firm at about 4.1 billion pounds ($8.1 billion).