Influential shareholder adviser Pirc has added its voice to growing calls for Marks & Spencer to appoint an independent chairman next year.
Pirc is also calling on shareholders to oppose approval of the retailer’s remuneration report at the AGM on July 8.
The Local Authority Pension Fund Forum (LAPFF) has tabled an AGM resolution – on which Pirc advised – calling for Sir Stuart Rose’s role as Marks & Spencer executive chairman to be split in July 2010 rather than a year later, as planned. The LAPFF has emphasised that it supports Rose but is concerned about the corporate governance implications of his dual role.
Pirc is in favour of the re-election of Rose as executive chairman but said: “In recommending shareholder support for the re-election of Sir Stuart, this should be viewed clearly within the context of the availability of the shareholder resolution, and without that alternative we would have been left with no alternative but to recommend opposition to the combined role.”
Pirc said: “We recognise that the M&S board required time to make the right choice of successor to Sir Stuart and to find a new independent chairman,
“However, in the increasingly difficult trading environment now facing one of our nation’s greatest retail companies, we believe that the board must move to reduce uncertainty and risk by disclosing the succession strategy.”
In its assessment of the LAPFF resolution, Pirc said it “provides shareholders with a safe vehicle for their concerns over the breach of long-standing best practice” and weclomed that it had been “positioned in a way as to be as supportive of the company as possible”.
Pirc is against approval of the remuneration report because it considers “variable pay excessive in the year under review and on a potential basis”.
It labelled the “golden hello” given to former food boss Steve Esom, who left last year, as a “case in point of why such one-off awards should not be granted” and questioned aspects of fashion supremo Kate Bostock’s cash retention arrangement.