Marks & Spencer executive chairman Sir Stuart Rose said today that he had decided to give up a third of the shares he’s entitled to under his current pay deal, ‘following feedback from shareholder representative bodies’. Rose continues to hold the chairman and CEO roles at M&S, which has led to criticism from the governance lobby – indeed, there’ll be a vote on forcing him to split the two roles at next month’s AGM. But with M&S finally planning to start the search for his successor in September, according to weekend press reports, Rose clearly wants to start smoothing things over with his investors...
Sir Stuart is waiving his entitlement to about 395,000 of the 1.18m M&S shares he was awarded by the remuneration committee for this year. When this came to light earlier this month, it’s fair to say that some shareholders weren’t terribly thrilled about the idea of Rose pocketing an extra £4.5m on top of his base salary – particularly given that the share price is currently about 13% lower than it was this time last year. In light of this ‘unexpected reaction’ (as deputy chairman Sir David Michels put it), Rose has done the decent thing and offered to forgo a third of his entitlement – as has marketing chief Steven Sharp (although FD Ian Dyson and clothing head Kate Bostock will both get their full whack).
There’s no suggestion that Rose was taking anything he wasn’t entitled to – in fact, M&S was keen to point out that the share award was perfectly in line with the terms of the plan approved by shareholders in 2005 (and he won’t exactly be on the breadline as a result, given that he could still take home about £3m-worth). So this looks like an attempt to ease some of the tension between board and shareholders: relations have been a little frayed by the events of the last year, as M&S has struggled on the high street and failed to solve their succession problem, so Rose will be desperate to get them back onside.
One development that certainly would make life easier is the selection of Rose’s successor as CEO. According to yesterday’s Sunday Times, M&S will start the search in earnest from September; the paper reports that headhunters are already clamouring for this plum brief, and the suspicion is that M&S will go for an external candidate (like Sainsbury's Justin King, perhaps?). As for Rose, he’s apparently said that he’ll ride off into the sunset as soon as the board can get the new boss in. That would resolve the governance row at least – although the sales issue could prove a bit more intractable...
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Rose waives M&S share award as succession row grows