James Davey -
Private shareholders in Sainsbury’s berated the board of the British supermarket chain at its annual meeting on last Thursday over its failed takeover of rival Asda, as well as a share price slump and what it pays its boss.
Sainsbury’s had its proposed £7.3 billion ($9.2 billion) takeover of Walmart owned Asda blocked by the UK competition regulator in April, which said the deal was likely to increase prices for shoppers.
The group spent £46 million on the Asda deal and Mike Coupe, chief executive since 2014, saw his total annual pay package rise 7 per cent to £3.88 million in the 2018-19 year despite the failure of the transaction.
Shareholder John Farmer, a regular critical voice on Britain’s annual general meeting circuit, said Sainsbury’s’ board had presided over a “blunderingly poor performance” and the “fiasco” of the failed Asda tie-up. He said Coupe, “this useless chief executive”, should be fired.
“For goodness sake, you as a board are paid to get things right and manifestly at the moment you are not,” said Farmer.
“When are you going to get your act together and deal with the world as it is, not as you would like it to be?” he added to applause from the around 450 investors present.
Private shareholders account for about 10 per cent of Sainsbury’s total equity.
Chairman Martin Scicluna, who succeeded David Tyler in March, responded by saying buying Asda was “a cracking deal”.
“I don’t think a business should shirk from making investments which they think are sound and reasonable and have a good chance of succeeding,” he said.
CHAIRMAN’S DEFENcE
Scicluna also backed Coupe, saying he “knows retail more than anybody in this world” and deserved to be rewarded for delivering a 7.8 per cent rise in 2018-19 underlying pretax profit.
“I don’t think it’s right to talk about our chief executive in the way you do. I have great respect for our chief executive and that’s why I said I’m not shopping around.”
Another shareholder, Jean Dale, who said she worked for Sainsbury’s for 25 years before losing her job as part of a cost savings programme, expressed dismay at the lowly share price and questioned whether it made the group “ripe for a takeover”.
Scicluna said Sainsbury’s poor share price, down nearly 40 per cent over the past year, reflected weakness in the wider market.
“Retail stocks and those companies focused on the domestic UK markets have not performed well, especially over the past few months and we tick both those boxes,” he said.
He said the current share price undervalues Sainsbury’s but the group has the strategy “to drive us forward.”
Coupe made unwanted headlines shortly after the Asda deal was announced in May 2018 when he was caught on camera singing “We’re in the Money”. He apologised, saying he had been trying to compose himself before a television interview.
“Has he got any other song today,” another shareholder asked at the meeting.
“Don’t tempt me,” Coupe replied.
He was re-elected to the board with 99.53 per cent of votes cast. — Reuters
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