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Last Updated: Thursday, 8 July, 2004, 15:01 GMT 16:01 UK
Sainsbury retreats on boss' bonus
Sir Peter Davis
Sir Peter's award was controversial
Supermarket group J Sainsbury has made a U-turn and decided not to back its earlier decision to award ex-chairman Sir Peter Davis a bonus of 2.4m.

The move comes after shareholder anger at the award, particularly as Sir Peter, who resigned on 1 July, presided over a fall in profit and market share.

The group's pay committee said it was now unable to support recommending an award of 864,000 shares to Sir Peter.

Analysis by new chief Justin King had produced "new information", it said.

Mr King made a presentation to a special board meeting on 30 June, at which he reported his "early analysis" on the condition of the company.

After Thursday's announcement shares in Sainsbury's were up by three pence to 275 pence.

Legal advice

The firm's remuneration report, which includes the proposed award to Sir Peter, will still be put to shareholders at the annual meeting on Monday, with the board's recommendation.

In a statement Sainsbury's said lawyers had advised it against an earlier consideration to put an amended resolution before the meeting, one which would have excluded the details of the award to Sir Peter.

The company said the original remuneration report would now go to the annual meeting, but "the board will not implement these recommendations in relation to Sir Peter Davis".

Former Lloyds TSB and BT finance director Philip Hampton replaced Sir Peter as Sainsbury's new chairman.

As well as the drop in annual profits Sainsbury's has also lost ground to both Tesco and Asda.

'Hard work'

Sir Peter's resignation is believed to have followed an emergency board meeting on 30 June, after shareholder anger that he had been awarded the 2.4m bonus.

At the time Sainsbury's thanked Sir Peter for "all his hard work on behalf of the company".

But it said it had not been possible to reach agreement in talks with Sir Peter over changes to his bonus package.

"It was mutually decided that this matter would be referred to legal representatives of both parties as part of his termination arrangements," the company said.

Some pension and investment groups plan to vote against the remuneration report at the annual meeting.

Sainsbury chairman is forced out
01 Jul 04  |  Business
Why Sainsbury's boss had to go
01 Jul 04  |  Business
Sainsbury chairman to stand down
30 Jun 04  |  Business
Sainsbury's 'us and them' bonuses
21 May 04  |  Business
Sainsbury's sees slide in profits
19 May 04  |  Business
Sainsbury's reports falling sales
26 Mar 04  |  Business
Sainsbury's U-turn over chairman
17 Feb 04  |  Business

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