M&S's Rose faces stormy showdown with shareholders

By Mark Potter

LONDON (Reuters) - Marks and Spencer boss Stuart Rose, lauded for reviving the landmark retailer just a year ago, is battling to save his job after bungled management changes and a big profit warning.

About 2,000 shareholders are set to gather for an annual meeting in London's Royal Festival Hall later on Wednesday, amid newspaper reports that up to 30 percent of them will abstain or vote against Rose's appointment as executive chairman.

That won't be enough to unseat the 59-year-old retail veteran, but it will step up the pressure on him to spell out his plans for management succession and for tackling a slide in underlying sales that has hammered profit forecasts.

"Shareholders need a Plan B or C," Lehman Brothers analysts said in a research note, cutting their rating on M&S shares to "equal-weight" from "overweight".

M&S infuriated some investors in March by saying that Rose would combine the roles of chairman and chief executive as part of a package that will see him stay at the company until 2011.

That dealt with speculation about whether Rose would stay with the company, but it also went against corporate governance guidelines, which warn against such a concentration of power.

Rose then upset some analysts last week by announcing that head of food Steven Esom, who had been tipped as a potential successor, was leaving after only about a year in the job, following a sharply weaker performance at the food business.

"I would expect high-profile shareholder resistance (at the AGM)," said Bernstein analyst Luca Solca.