LONDON BRIEFING:WITH anti-business sentiment at fever pitch, the silver-haired chairmen of two national institutions yesterday ran the gauntlet of public anger on either side of the Thames.
On the South Bank, Marks & Spencer chairman Robert Swannell compered a fractious annual meeting of shareholders at the Royal Festival Hall while, in Westminster, Barclays chairman Marcus Agius faced MPs who claimed the scalp of his chief executive Bob Diamond last week.
The two chairmen were cast in the same mould. Both are blue-blooded career investment bankers who learned their trade in the days before men like Mr Diamond took over the City of London. Both in their 60s, they share a patrician manner which they relied on yesterday to smooth the ruffled feathers of the troublesome.
Mr Swannell had by far the easier task. M&S, which has more than 700 stores in Britain and Ireland, has just turned in its worst sales performance since 2008, but at least it has not been implicated in a global conspiracy to rig interest rates.
Every year, thousands of small shareholders descend on London for the M&S agm, nursing grievances about everything from the non-availability of socks in half sizes to executive pay.
This year they had plenty to complain about. Clothing and general merchandising sales fell 6.8 per cent in the last quarter, leaving the retailer worth less than its upstart high-street rival Next. Womenswear, in particular, has looked directionless, with M&S’s core middle-class, middle-aged female customers complaining they can no longer find the classics they want.
M&S got on to the front foot ahead of the meeting with an early announcement that Kate Bostock, the head of the ailing division, is to leave. The retailer has blamed its poor sales on this year’s unexpectedly bad weather, but Ms Bostock’s sacrifice to the mob has been well-trailed.
Following a reshuffle, she will be replaced by John Dixon, who pioneered M&S’s much-copied “Dine in for Two” for €12.50 offer, and Belinda Earl, who joins from Jaeger, where she was highly rated. Ms Earl, however, joins only on a part-time basis and it is far from clear that this modest board reshuffle will stop the rot.
Mr Swannell, who like the rest of the board was dressed from head to foot by M&S yesterday, made a good fist of placating investors, cruising through most of their questions.
A Mr Farmer caused a ripple when, referencing chief executive Marc Bolland’s £1.6 million (€2 million) pay packet, he asked why shareholders should put up with the “Bob Diamond of retail”.
He could have added that Mr Diamond has made a lot more money for investors than Mr Bolland, who analysts still tip to go within the year.
The biggest gripe, though, was that investors were robbed of the traditional MS lunch. Instead of the usual spread, shareholders were sent away with an “austerity” packed lunch consisting of a sandwich and chocolate bar. Of all the indignities, this was by far the most deeply felt. Note to MS: in future, if you’ve got no real good news, don’t cut the catering.
Across the river, Mr Agius would gladly have traded the Libor price-rigging scandal for a row about sandwiches. The embattled Barclays chairman had some hard-fought news for hostile MPs at the treasury select committee: after intense negotiations, Mr Diamond had “voluntarily” agreed to forgo a £20 million payoff.
The former Barclays boss, whose estimated personal worth is £100 million, would instead make do with his £2 million salary.
But MPs, who have often been ineffective in their set-piece encounters with bankers, must have been practising. In interviews with Mr Agius, they finally pinned down the details of Mr Diamond’s departure last week and nailed Mr Agius down on the bank’s long-strained relations with UK regulators.
Mr Diamond, it emerged, agreed to leave Barclays only after Bank of England governor Mervyn King personally summoned Mr Agius to his office and told him Mr Diamond “did not enjoy the support of regulators” – the death knell for any bank chief executive.
MPs also revealed letters sent by the Financial Services Authority to Barclays in April in which its head Lord Turner criticised Barclays for “aggressive” obfuscation and misreporting of its tax and financial affairs since 2008.
It comes as no surprise to those of us who have had to wade through Barclays labyrinthine financial statements that the FSA has long suspected Mr Diamond was hiding something. The view in the City is that whatever his culpability on Libor, he should have gone for that sin alone.
Helen Power is a freelance journalist
