The sun and Sir Ken were both shining on Messrs Higginson and Potts at Morrisons HQ today at the supermarket’s AGM.
And, despite the weather, Morrison’s blessing did much to ensure the temperature inside the meeting was much cooler than a year ago when the Morrisons life president and former chairman said Dalton Philips’ strategy had the distinct whiff of “bullshit” about it.
The number of hacks assembled at the AGM more than doubled from 2014, all hoping that lightening would strike twice, but a savvy Sir Ken kept it short calling for patience and breathing space as the exec team got on with the “big job” of restoring Morrisons to its former glory.
The fact that Andrew Higginson and David Potts have retail in their blood surely helped to seal the industry legend’s approval and along with him the majority of long-standing shareholders who hang on his every word – indeed Higginson told journalists after the meeting that Sir Ken’s support was “very helpful as his voice carries a lot of weight”.
Despite little anger in the room directed at the new management, there was plenty reserved in their absence for previous chairman Sir Ian Gibson and Philips, who one shareholder today said used English words but made no sense.
Others bemoaned the “inept” past management who had “destroyed” shareholder value and landed the company in its present state, one gentleman was “mystified” why Philips was receiving a £1m bonus for failure with another calling his final pay packet “vastly excessive” and “ridiculous”.
It came as no surprise then that a significant minority (36.65%) voted against the Morrisons remuneration policy set out in the latest annual report.
However, Higginson’s AGM strategy was slick. He kicked off with a well-worn – and well-received – joke about being from Lancashire which he hoped the assembled Yorkshire faithful wouldn’t hold against him. He then put the difficulties of Morrisons into context saying the difficulties in grocery were a “collective failure” of the Big Four which had focused too much on each other and not on the customer. And finally he attempted to deflate criticism by answering expected questions about remuneration before they came. He said there were “many reasons” why shareholders had revolted not just the one headline-generating story of Philips packet.
Potts followed up at his first AGM by telling investors that while it had not been easy he had noticed positive signs in his first few weeks in the job. He added that following Darren Blackhurst joining from B&Q as commercial director there were more “key appointments to come”. “We’re building a strong, effective and practically minded team,” Potts said.
Then came the warm words from Sir Ken leaving the rest of the meeting to pass in relative peace.
The main issues raised during the shareholders Q&A – which also featured a surprisingly significant number of questions asked by Morrisons staff (a new culture of transparency?) – were about lack of availability, the bad management of the Dalton Philips era and pay surrounding it, the confusing Match & More card and the Living Wage.
Higginson countered that availability was an issue of frustration for shoppers but something was being done about it immediately. He stressed that shares awarded to Philips under the LTIP scheme had not and would not vest because they didn’t hit the right targets. When it came to the Living Wage he said the supermarkets were a meritocracy with lots of opportunity as shown by the rise of Potts from shelf stacker to CEO. And Potts added the Match & More scheme as under “careful review”.
All in all, although the road ahead is long and far from certain, the new chairman and CEO can feel pretty pleased with themselves in a week which included being the only one of the Big Four to register a rise in sales in the latest Kantar figures, a climbing share price saving them the embarrassment of losing Morrisons place in the FTSE 100 and a warm reception at a sunny AGM.
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