Marks & Spencer has offered shareholders concessions over controversial plans to name Sir Stuart Rose as executive chairman. Last month M&S said chief executive Sir Stuart would stay with the firm for an extra two years, until 2011, and be made executive chairman from 1 June.
But shareholders criticised the plan saying it gave too much responsibility to one executive. According to the BBC, concessions include yearly elections for Sir Stuart and no pay increase. Other measures proposed in the letter to shareholders, include appointing Sir David Michaels as deputy chairman while maintaining his position as a senior independent director.
The retailer also said two new executive directors would be appointed and “significantly enlarged responsibility” would be given for the group finance and operating director.
And to ensure the board has a majority of independent directors, the firm would hire an additional non-executive director, said M&S. “The board is very conscious of the governance arguments companies should split the roles of chairman and chief executive as it is undesirable to have too much concentration if authority in one person,” said the letter.
But it added that the decision had been made reflecting the “transition” the retailer was going through and the appointment was in the “interest of shareholders, customers and employers”.
Sir Stuart was initially appointed for a five year term in 2004, to turn around the business.
But no obvious candidate emerged to take over in 2009 said M&S and given the recent uncertainty in the retail environment, the firm decided to extend and expand his position.
But leading investors opposed the move, with Legal & General Investment Management, which holds 5% stake in the firm saying corporate governance standards should not be diluted “particularly in leading UK companies”.
Image: Stuart Rose
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