Marks & Spencer today (3 April) offered unhappy shareholders a number of concessions to pave the way for its proposed appointment of CEO Sir Stuart Rose as executive chairman.
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The UK retailer’s board of directors wants to expand Sir Stuart’s role when the current executive chairman, Lord Burns, steps down in June. However, such a move has met fierce shareholder resistance.
In an attempt to end the row, M&S sent out a five-page letter to institutional investors this afternoon.
“The letter includes a number of concessions but it is too early to guage shareholder reactions,” a spokesperson for M&S told just-food.
M&S has proposed that Sir Stuart stands for re-election to the board every year, starting at this year’s shareholder meeting in July. His salary will remain unchanged at GBP1.1m (US$2.19m), the board added.
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By GlobalDataIn the letter, M&S also emphasised that the appointment is only a temporary solution. In 2011, M&S will revert back to having a separate chairman and chief executive, the company stated.
Finally, M&S said it would consider the appointment of a second non-executive director.
It was widely expected that Sir Stuart would step down as CEO next year. However, under the changes announced on 10 March, in June he would also take on the role of executive chairman, which he will keep until 2011.
“It was important to secure Stuart’s appointment and to change the emphasis of his responsibilities in order to put in place a clear path of transition to a new chief executive appointment,” Lord Burns wrote.
