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February 16, 2004

UK: Sainsbury’s in shareholder battle over choice of chairman

UK supermarket group Sainsbury’s may be forced to ask incoming chairman Sir Ian Prosser to stand down in the face of hostility from shareholders.

UK supermarket group Sainsbury’s may be forced to ask incoming chairman Sir Ian Prosser to stand down in the face of hostility from shareholders.

A number of major shareholders have voiced their dissatisfaction at the news last week that Prosser was to take over from Sir Peter Davis. They say his track record at leisure group Six Continents gives cause for concern, as his reign was characterised by poor shareholder returns and an inflexible attitude towards shareholders.

The company is currently in meetings with large shareholders to explore their objections as well as to explain its reasons for appointing Prosser.

A spokeswoman for Sainsbury’s said the company would listen to shareholders’ views.

Should the company be forced to retract its offer to Prosser, it could face a sizeable compensation claim. It is believed that Prosser has already signed the contract for his new job, which would see him earn £350,000 (US$659,900) per annum once he took up the chairman’s role.

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