After an internally turbulent couple of weeks for M&S in which various shareholders decried Stuart Rose’s joint position as CEO and chairman, a majority vote at the annual shareholder meeting means that Rose will stay on in both roles.
Only 40% voted in favour of a special motion suggested by the Local Authority Pension Fund Forum (LAPFF) to bring in a new chairman by July 2010 (a year earlier than planned) to bring M&S in line with standard regulations and to leave Rose holding only the CEO position.
Rose told the Telegraph Business he was ‘not surprised at the outcome’ – and as we reported on Tuesday, he was surprisingly calm before the event. “I thought we would win and we did,” he confidently told the paper.
But how fair is it that he should hold both roles, and is it even healthy for a company to cover both bases with one person? Does a CEO not on occasion need a chairman to bring him in line, to debate ideas with, simply to have, even, someone to answer to?
Well, with M&S’s enduring success (dips in sales have consistently been less damaging than anticipated and a string of great initiatives has kept it in the public’s favour), perhaps not at the moment.
More notably, perhaps, for shareholders as for Rose, is the question of salary - that he deserves to be paid for both roles for his work in the business. The shareholders obviously think he’s worth it. “If you are going to have Sir Stuart, and the price you have to pay is that he is chief executive and chairman, then that’s what you have to do,” shareholder Alan MacDonald told the Telegraph Business.
But in contrast to the cheery enthusiasm of this meeting’s results, according to the same newspaper the proxy voting agency Manifest said despite the outcome of the vote, the LAPFF’s suggestion had still attracted two times as much support as any previous FTSE 100 resolution. To make matters more troubling, 21% of shareholders didn’t back Rose’s re-election to the company.
Much as we hate to say it, we fear M&S’s internal strife may not be quite over yet.
Watch this video from the BBC documenting various M&S shareholders’ opinions on it all: