M&S holds talks to quell Rose rebellion
Marks & Spencer's directors are embarking on a new wave of investor talks as they try to quell mounting anger over plans to appoint chief executive Sir Stuart Rose as executive chairman.
Set for promotion: Sir Stuart Rose.
Faced with calculations that over 15% of the retailer's institutional shareholder base oppose the move, chairman Lord Burns and deputy chair Sir David Michels are seeking further meetings with investors to explain the decision.
M&S last night defiantly defended its boardroom shake-up, which breaches corporate governance guidelines, but it refused to be drawn on whether it will consider compromise proposals being put forward by some shareholders.
A spokesman said: 'Since we made the announcement we have talked to half the institutional investor base. Feedback from them, bar L&G and Schroders, is they are broadly supportive.' Yet the firm refused to name a single shareholder who is backing the move.
Fund manager Schroders joined the parade of protesters over the weekend, claiming the decision to concentrate so much power in one pair of hands set an 'appalling precedent'.
Legal & General started the ball rolling with a public complaint after the decision was announced, and the insurer has won 'a lot of sympathy for its views,' another shareholder said yesterday.
Brandes and Fidelity are also thought to be unhappy about the appointment. Some investors say M&S could compromise by appointing a new deputy chairman to the board as a counterweight to Rose.
The retailer could also allay some concern by putting the appointment to a formal shareholder vote and putting Rose up for annual re-election.
• Tesco has put the expansion of its Fresh & Easy chain on ice for three months, re-igniting fears that the venture is struggling to make headway in the treacherous world of US retailing.
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Simon Unwins, the division's marketing director, last week said the firm wants to take a pause to let the US business 'settle down.'
'We have given ourselves a little bit of time to kick the tires, smooth out any wrinkles, and make some improvements that customers have asked for,' he said.
The firm stressed expansion will continue later this year. It wants to have 200 stores open by early 2009.
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