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Shareholders to grill M&S bosses | Shareholders to grill M&S bosses |
(10 minutes later) | |
Marks and Spencer executives are set to face a grilling from investors at its annual general meeting in London later. | Marks and Spencer executives are set to face a grilling from investors at its annual general meeting in London later. |
Some of the retailers' biggest shareholders are against chief executive Sir Stuart Rose also taking on the role of chairman. | |
It is thought up to 30% may abstain or vote against his re-appointment as a director in protest. | It is thought up to 30% may abstain or vote against his re-appointment as a director in protest. |
Investors will also want to know more about the outlook for M&S after a sharp drop in sales. | Investors will also want to know more about the outlook for M&S after a sharp drop in sales. |
Its shares fell almost 25% after Sir Stuart said last week that the company faced up to two years of difficult economic conditions that will hit its profits. | Its shares fell almost 25% after Sir Stuart said last week that the company faced up to two years of difficult economic conditions that will hit its profits. |
'Unwelcome distraction' | 'Unwelcome distraction' |
M&S's plans to appoint Sir Stuart executive chairman, a position that combines the roles of chief executive and chairman. | |
Holding the dual role is against UK corporate governance guidelines and has proved unpopular with some shareholders. | |
"Combining the two roles in one person represents a dangerous concentration of power that is potentially detrimental to board balance, effective debate and board appraisal," corporate governance firm PIRC said. | "Combining the two roles in one person represents a dangerous concentration of power that is potentially detrimental to board balance, effective debate and board appraisal," corporate governance firm PIRC said. |
A company chief executive looks after the day-to-day running of the business, while a chairman is meant to make sure he or she is doing a good job. | A company chief executive looks after the day-to-day running of the business, while a chairman is meant to make sure he or she is doing a good job. |
There will be no specific vote on whether Sir Stuart should hold both posts, but PIRC recommends shareholders vote against his re-appointment as a director to show their opposition to the move. | There will be no specific vote on whether Sir Stuart should hold both posts, but PIRC recommends shareholders vote against his re-appointment as a director to show their opposition to the move. |
In a letter to shareholders in April, M&S said appointing a new chief executive in 2008 or 2009 to replace Sir Stuart "was likely to be a damaging and unwelcome distraction at precisely the time that the business needed clear leadership to sustain its recovery and transformation". | In a letter to shareholders in April, M&S said appointing a new chief executive in 2008 or 2009 to replace Sir Stuart "was likely to be a damaging and unwelcome distraction at precisely the time that the business needed clear leadership to sustain its recovery and transformation". |
Takeover speculation | Takeover speculation |
Sir Stuart was brought in to fight off a takeover attempt from the billionaire owner of Top Shop, Sir Philip Green, in 2004. | Sir Stuart was brought in to fight off a takeover attempt from the billionaire owner of Top Shop, Sir Philip Green, in 2004. |
Rumours that Sir Philip might be about to try again circulated on Monday, giving a much-needed boost to M&S shares. | Rumours that Sir Philip might be about to try again circulated on Monday, giving a much-needed boost to M&S shares. |
M&S shares closed 7% higher at 231.50 pence. Before last week's profits warning they had been trading at more than 330p. | M&S shares closed 7% higher at 231.50 pence. Before last week's profits warning they had been trading at more than 330p. |
However, Sir Philip denied reports that he had been buying up M&S shares. | However, Sir Philip denied reports that he had been buying up M&S shares. |