The City has welcomed the appointment of Philip Hampton, group finance director of Lloyds TSB Group, as the new chairman of Sainsbury.
Hampton has a reputation for pushing through radical restructure and change which one analyst said was exactly what the beleaguered supermarket chain needed. “There is definitely a tick in the box there. Sainsbury needs restructure and change.”
Hampton takes up his appointment on July 19, just days after the annual general meeting on July 12 when shareholders are expected to create a furore over the £2.4m share bonus that Sir Peter Davis is due to receive.
Sir Peter resigned as chairman and director on Thursday, a year ahead of schedule, and as the retailer posted a profit warning for the coming year.
Sir Peter has been under fire from shareholders since May after the revelation of his proposed £2.4m shares award. Now under review, it had been supposedly tied to profit targets, but the retailer saw pre-tax profit fall 8.5% to £610m in the year to March 27.
One analyst said: “Institutional investors have been exceedingly unhappy with the bonus arrangements and no compromise was reached.”
He said the issue had been set to cause chaos at the agm on July 12 so it made sense for Sir Peter to bow out before then. He added: “Shareholders will be very pleased he has gone and the company can now move on to address the structural and trading problems.”
Another analyst said: “It was a disgrace for Sir Peter to be paid such a bonus and the whole issue looked like blowing up at the agm.”
He said his continued presence as chairman could have prevented chief executive Justin King from announcing substantial changes to the business: “With Sir Peter gone, King has announced the launch of his review.”