Insights from the UK and beyond
Marks & Spencer is finally getting to grips with the recession, first-quarter results from the bellwether retailer show. But it needs to sort out a row over management if its shares are to enjoy the full benefit.
Many investors are still up in arms over M&S’s decision last year to elevate the charismatic Stuart Rose to executive chairman — combining the roles of chairman and chief executive against corporate governance guidelines.
Rose survived a rebellion last year and must be hoping that forecast-beating first-quarter sales will draw the sting from opponents ahead of next Wednesday’s annual shareholder meeting.
But anger seems unlikely to die down. Three shareholder advisory groups — Glass Lewis, Pirc and RiskMetrics — have urged investors to back a rebel resolution which calls on M&S to appoint an independent chairman by July 2010.
Just a year ago, Stuart Rose’s stock was riding high as the man who turned round Marks and Spencer but now he faces shareholder anger over controversial management changes, a big profit warning and a proposal to make him executive chairman as well as chief executive.
M&S shares lost 33 percent of their value last week after the warning.
Rose upset some analysts last week by announcing that head of food Steven Esom, who had been tipped as a potential successor, was leaving after only about a year in the job, following a sharply weaker performance at the food business.