Directorate Change

RNS Number : 7762Y

Sainsbury(J) PLC

29 January 2014

 



29 January 2014

Sainsbury's announces Justin King to step down;

Mike Coupe appointed CEO from 9 July 2014

Sainsbury's today announces that Justin King has decided to step down in July 2014 after 10 years as CEO, and that Mike Coupe, currently the Group Commercial Director, will succeed him as CEO. 

David Tyler, Chairman said: "Justin is a truly exceptional leader, who has reshaped Sainsbury's during his 10 years as CEO, as well as playing a leading role in the sector and wider business world.  The Board thanks him for his outstanding achievements in 'Making Sainsbury's Great Again'.  He leaves a lasting legacy, with the Company stronger than ever.

"We are delighted to appoint a CEO of Mike's unique talent and experience as Justin's successor to lead the next chapter of Sainsbury's history.  No one knows Sainsbury's - or the industry - better than Mike.  He has worked hand-in-hand with Justin over the past decade and has a proven track record of success making him the natural choice to take the Company forward."

Justin King, CEO said: "This was not an easy decision for me to make, and in truth it will never feel like the right time to leave a company like Sainsbury's.  It has been a privilege to have led the Company for the past 10 years and I am incredibly proud of our achievements in that time.  It is the 157,000 colleagues that make Sainsbury's so special and I would like to thank them for their amazing efforts over the last decade in making Sainsbury's great again.  I am confident that under Mike's leadership the business will go from strength to strength."

Mike Coupe, CEO designatesaid: "It's an absolute honour to be appointed as the new CEO of Sainsbury's in this, the Company's 145^th year, and at a time when thanks to Justin's leadership, we have been consistently outperforming the market.  I very much look forward to building on that success for our customers, colleagues, suppliers and shareholders."

Notes to editors:

·     Justin will stand down as CEO at the AGM on 9 July 2014.

·     Mike Coupe will continue as Group Commercial Director and CEO Designate in the interim.

·     John Rogers continues as Chief Financial Officer.

Enquiries

Investor Relations                                     Media

Adam Wilson Katsibas / Kellie Herman        Trevor Datson / Alex Cole

[phone]                             [phone]

Sainsbury's 2004 - 2014

1.  10m additional customers a week

§ c24m transactions a week in 2014 (vs 14m in April 2005)

§ Excellent customer service winning 14 of 30 Mystery Shopper awards for Service & Availability in 2013/14 (The Grocer)

§ Supermarket of the Year 2013 (6th time in eight years - Retail Industry Awards)

§ Brand of the Year 2013 (Marketing Society)

§ FTSE100 Business of the Year 2013 (National Business Awards)

2.  £9.5bn of incremental sales

§ £16.1bn in 2004/5 (vs £25.6bn for 2012/13)

3.  Underlying profits almost trebled

§ £254m in 2004/5 (vs £756m 2012/13)

§ Over £600m operational cost savings since 2008/9

§ Underlying operating margin up to 3.56% in 2012/13 (from 2.15% in 2004/5)

4.  Market share continuing to grow

§ 17.1% (Kantar 12 weeks to 5^th January)

5.  Compelling non-food business

§ 7^th biggest clothing retailer in the UK by volume, 11^th by value

§ 7^th biggest GM retailer in the UK by value

§ Full offer in over 400 stores with 1/3^rd of the population now within a 15 minute drive

6.  Scale convenience business

§ Nearly 600 convenience stores now opened (596 compared to 262 in 2004/5)

§ Awarded Convenience Chain of the Year (4^th consecutive year - Retail Industry Awards)

7.  Strong online business

§ £1bn online grocery business with over 190,000 orders each week

§ Online Retailer of the Year 2013 (2nd consecutive year - Grocer Gold Awards)

8.  Sainsbury's Bank

§ Five consecutive years of profit growth

§ Acquisition of remaining 50% stake from Lloyds Bank Group completes on 31 January 2014

9.  Values a strategic point of difference

§ Leading positions on nutritional labelling, British sourcing, Fairtrade, RSPCA Freedom Foods and MSC

§ £136m worth of Active Kids equipment donated since 2005

§ First sole-sponsor of the Paralympic Games in 2012

10.     Colleagues at the heart of our success

§ Record levels of colleague engagement (as measured by our annual Talkback survey)

§ Only food retailer accredited to Gold Standard by Investors in People

§ £520m to colleagues in bonuses (2005/6-2012/13)

§ Employer of the Year 2013 (Retail Week Awards)

Biographies

Justin King: (52 years old) Appointed Chief Executive Officer on 29 March 2004.  Non-Executive Director of Staples Inc since September 2007.  He is a member of the CBI President's Committee and a Visiting Fellow of Oxford University's Centre for Corporate Reputation.  Justin was a member of the Board of LOCOG, the London Organising Committee of the Olympic Games and Paralympic Games (2009-13) as well as the Prime Minister's Business Advisory Group (2010-12).  He was previously the Director of Food at Marks & Spencer Group plc.  Prior to this, Justin held a number of senior positions at ASDA/WalMart and Häagen Dazs UK.  He spent much of his early career with Mars Confectionery and Pepsi International.  In 2013, Justin was named Most Admired Business Leader by Management Today as well as Britain's Most Impressive Businessman in the IPSOS-MORI Captains of Industry Report.

Mike Coupe: (53 years old) Appointed Group Commercial Director on 19 July 2010, Mike is responsible for Trading, Marketing, Supply Chain, IT and Online.  He has been a member of the Operating Board since October 2004 when he joined as Trading Director (2004-10), and an Executive Director of J Sainsbury plc since 1 August 2007.  Prior to joining Sainsbury's he was a Board Director of Big Food Group plc and Managing Director of Iceland Food Stores (2001-04).  Mike previously worked for ASDA (1993-2001) and Tesco (1985-1992), where he served in a variety of senior management roles.  He began his career at Unilever.  He was appointed to the Board of i2c (Insight 2 Communication) at its inception in 2012 and is also a Non-Executive Director at Greene King plc.

Remuneration

The following information is provided in accordance with section 430(2B) of the Companies Act 2006.

Justin King will receive no annual bonus or Deferred Share Award for 2014/15, and will receive no awards under the Long-Term Incentive Plan ("LTIP" - known as Value Builder or Future Builder) for 2014/15. He will remain eligible for consideration for payment of an annual bonus and Deferred Share Award for 2013/14, subject to performance over this period and determined in the normal manner after the year end.

Under the terms of his contract, Justin could be entitled to a cash severance payment of up to 175% of his base salary (worth potentially up to £1.7m) at departure.  However, he has offered to waive the cash entitlement and the Remuneration Committee has therefore determined that:

·     There will be no payment in lieu of notice.

·     There will be no acceleration of vesting for any share awards.

·     The 2012/13 and 2013/14 Deferred Share Awards will subsist in full and will be released at the end of the deferral period.

·     The performance period for the 2011 LTIP award is due to end in March 2014, prior to Justin's departure. This will vest in tranches during 2014 and 2015, subject to normal performance conditions.

·     LTIP awards made to him in 2012 and 2013 will subsist in full and will vest at the normal date subject to normal performance conditions.

This arrangement ensures that any payment to Justin is aligned with the performance of the Company following his departure; a sign of his confidence in the new management and the business's continuing prospects.

Mike Coupe will receive a salary of £900k as Chief Executive.  The overall variable incentive opportunity for the Chief Executive role will remain unchanged.  However, it will be rebalanced towards the long-term award (Future Builder LTIP award).  The incentive opportunity will be limited to 110% of salary for each of the annual bonus and Deferred Share Award with vesting subject to achievement of performance targets.  Mike will be granted a core LTIP award under the Future Builder of 62.5% of salary with potential vesting of 0-4x (ie up to 250% of salary for achievement of stretch objectives) subject to 3-year performance targets.  The changes in incentive opportunity will only come into effect from the date of promotion and so will be pro-rated accordingly in 2014/15.  He will receive a pension allowance of 30% of salary.  Mike's contractual terms have been aligned with current best practice. 

Further details of the operation of the Deferred Share Award and LTIP are set out in the Directors' Remuneration Report in our Annual Report and Accounts 2012/13.  Full disclosure of these remuneration arrangements will be provided in our Directors' Remuneration Report in our Annual Report and Accounts 2013/14.

- ENDS -

Enquiries

Investor Relations                                          Media

Adam Wilson Katsibas / Kellie Herman            Trevor Datson / Alex Cole

[phone]                                [phone]

 

END

 

 

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