Expert Corporate Governance Service (ECGS)
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Etude l' AG du 05/07/2017

The Company’s Chairman, Mr. Tyler, was sent a warning letter following an internal investigation which concluded there were material breaches of three Company policies in 2013.  He was found to have used the services of a member of the supermarket’s sustainability team, who had expertise in green energy and engineering, to review plans for underfloor heating systems at his barn conversion.
The Sainsbury’s employee gave advice after visiting Tyler’s property several times, during working hours, and asked a supermarket building contractor to develop a proposed action plan – which the firm carried out for free. It then conducted a £10,000 installation of an oil-fired boiler in partnership with builders already working on Tyler’s property. Two other Sainsbury’s suppliers were also contacted for specialist advice on alternative fuel sources for the heating system.
Sainsbury’s concluded that the Chairman had paid the going market rate for the job and so hadn’t benefited financially.  The company stated that the ‘The chairman was given a warning but the board concluded that his failure to comply with company policy was unintentional, that he did not act dishonestly and made no financial gain.’   Tyler gave £5,000 to charity, reflecting the value of the services.
Nevertheless, use of Company resources by employees for personal reasons is not in the interest of shareholders.  This should be even more the case for the Chairman given his importance and potential impact as a leader and model of acceptable behaviour.
Item 2: Approve the Remuneration Report. The structure is not acceptable.  The maximum bonus exceeds guidelines. The structure is weighted more towards rewarding long-term performance, but only slightly.  The payout was considered adequately aligned with performance during the year, but this was due to a discretionary decision of the Remuneration Committee not to pay a bonus. Qualitative criteria exceed guidelines.  Accelerated vesting in the event of a change of control is possible.  The quantum was excessive, though no cash bonus was paid out.

J Sainsbury PLC

J Sainsbury is principally engaged in food, general merchandise and clothing retailing and financial services. Co. is organized into four operating segments: Retail (Food), which provides a range of food, including organic produce; Retail (General Merchandise and Clothing), which provides a range of products across home, clothing, technology and leisure; Financial Services (Sainsbury's Bank plc and Argos Financial Services entities), which provides products such as credit cards, insurance, travel money and personal loans; and Property Investment (The British Land Company PLC and Land Securities Group PLC joint ventures). At Mar 11 2017, Co. had 605 supermarkets and 806 convenience stores.


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