Sainsbury’s Shareholders Back Coupe Despite Failed Asda Merger

(Bloomberg) --

J Sainsbury Plc shareholders gave Chief Executive Officer Mike Coupe a vote of confidence at the supermarket operator's annual general meeting Thursday, despite declining sales and the collapse of its planned acquisition of Walmart Inc.'s Asda.

More than 99% of investors voted in favor of keeping Coupe on the board. Still, some investors questioned Chairman Martin Scicluna on Sainsbury's falling share price, failed merger, the board's pay and why he isn't searching for a new CEO at the meeting.

Coupe “is the right guy to be serving us right now,” the chairman said.

The questioning came three months after U.K. regulators blocked Sainsbury's planned purchase of Asda on concerns the deal would lead to price hikes and a supplier squeeze. Coupe has faced scrutiny since then over his proposed pay packet of 3.9 million pounds ($4.9 million), as Sainsbury's sales decline.

Coupe defended his pay when announcing first quarter results Wednesday, saying it “absolutely” reflected the company's financial performance last year. "My pay is set by a remuneration committee. I'm set a series of targets at the beginning of any financial year and my performance and the business's targets are what determines my overall package," he said on a call with reporters.

The grocer reported declining sales in general merchandise, clothing and grocery on Wednesday. Its share price has fallen 36% since the merger was announced in April last year.

"It's a hugely competitive market and we have to make the business more efficient in order to compete with discounters," Coupe said.

While about 90% of investors approved the board's pay packet, some vented their frustration.

"You're trudging along failing to deal with the market, competition and not making a proper return," John Farmer, a shareholder, told Scicluna. "You should get rid of this useless CEO. It's a lamentable situation."

To contact the reporter on this story: Ellen Milligan in London at emilligan11@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier

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