Sainsbury family steps in to avoid AGM defeat
The group is facing an investor revolt over a £2.4 million share award it had planned to give its former chairman Peter Mr Davis.
The group has since withdrawn the award of 864,000 shares for 2003/2004, a year when annual profits fell by 2.9% to £675 million, after seeing a report on the firm by new chief executive Justin King.
However, it said it would still be putting the original remuneration report up for approval at tomorrow’s AGM.
About 30% of shareholders are understood to be planning to either abstain or vote against it, with both the Association of British Insurers and the National Association of Pension Funds urging its members not to support the report.
However, it emerged yesterday that the Sainsbury family, which has a 35% stake in the group, will vote in favour of the report.
Judith Portrait, the solicitor who looks after Lord Sainsbury’s 23% interest, is believed to be planning to support the board, and the rest of the family are expected to follow suit.
Mr Davis quit as chairman earlier this month following pressure on the company from institutional shareholders unhappy about its recent performance.
Sainsbury’s has been losing ground during the past 12 months to rivals Asda and Tesco due to stiff price competition.
The group said at the time that discussions with Sir Peter about possible amendments to the share award had failed, and the matter was now in the hands of both parties’ lawyers.
Meanwhile it was reported that Keith Butler-Wheelhouse may resign as head of the supermarket’s remuneration committee following the row.
Incoming chairman Philip Hampton, who replaces Mr Davis next week, is also expected to announce an immediate review of the group’s board and pay policy in a bid to appease angry shareholders.
A Sainsbury’s spokeswoman declined to comment on the reports, saying the group did not comment on rumour and speculation.
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