A senior director at Sainsbury’s is attempting to broker a last-minute deal with city investors to avert a damaging revolt over an award of free shares worth £2.5 million to Sir Peter Davis.
Lord Levene, the supermarket group’s senior independent director has asked shareholders if Sir Peter would win their support if he were to return 10 per cent, around £250,000, of his controversial bonus to the company.
Investors, who are disgruntled with Sir Peter’s performance while he was chief executive, are understood to have turned the offer down flat. Negotiations are continuing, however, and Sir Peter could be forced to hand back a much higher figure. The supermarket wants to have the matter resolved prior to its annual meeting on July 12.
Some shareholders say even if Sir Peter were to hand back a substantial proportion of his bonus it would not be enough to guarantee their vote without a complete rewriting of the share award plan, set up in 2003, which generated the payout. It runs for another year and could provide a further £1.45m of free shares next spring.
Sir Peter became Sainsbury’s chairman in March, a move made in spite of the Higgs guidelines which say it is undesirable for a chief executive to move up to chairman in the same company.
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