Marks and Spencer has come under fresh attack over its continued insistence that the powers of chief executive and chairman are combined under Sir Stuart Rose as executive chairman.
In a research note to institutional investors, advisory firm PIRC has called on M&S shareholders to oppose the retailer’s remuneration report. The move comes a matter of days after Rose gave up GBP1m (US$1.6m) worth of shares to appease shareholders.
While PIRC has supported the re-election of Rose, it has also suggested that investors should back a resolution from the Local Authority Pension Fund Forum, calling for the appointment of an independent chairman by July 2010.
“We are basically seeking that the company split the roles of chairman and chief executive. It is a well-established principle in UK corporate governance that these roles are split,” a spokesperson for PIRC told just-food today (25 June).
According to the spokesperson, the chairman and CEO roles are – and should remain – “different jobs” and by combining them there is a concern that there will be an “unhealthy” concentration of power.
When Marks & Spencer announced that it was combining the roles last year, the company said that the move would ensure a smooth succession process.
“All the investors that we have spoken with don’t think this is necessary…. When the appointment of a new CEO lies in the hands of the current chief executive it raises a concern that he will appoint someone in his own image – rather than the best person for the company,” the spokesperson said.
To add weight to this fear, when M&S initially announced the combination of roles it said that five internal candidates were being considered. Three of these candidates have since left the company, the spokesperson said.
”Certainly, some shareholders feel that the succession process is in a bit of trouble,” he added.
M&S declined to comment on the news.