Wetherspoon boss reports 5.3% like-for-likes and criticises shareholders

Martin

Wetherspoon boss Tim Martin has launched an attack on City rules, arguing they have caused firms to go bust and pose a threat to the UK economy.

He was also scathing about shareholder advisers, who have told investors to vote against the company’s annual report over the pub chain’s spending £95,000 on pro-Brexit beer mats.

In a lengthy trading update, Mr Martin then waded into one of the company’s biggest shareholders, whose actions he said had destabilised the company.

 

Business-wise, like-for-like sales increased by 5.3% and total sales by 5.6% in the 13 weeks to 27 October 2019, with one pub opened and four shut. It also said JD Wetherspoon aimed to open up to 15 pubs in the current financial year.

But Mr Martin mainly used the update to vent his anger at the system of corporate governance (CG) and rules that say non-executives should only serve on boards for a maximum of nine years.

These roles are supposed to be impartial and regulators believe there is a risk to their independence if they stay longer.

He said, “There can be little doubt that the current system has directly led to the failure or chronic underperformance of many businesses, including banks, supermarkets and pubs.

“I believe by vesting so much power in non-executive directors (NEDs), the system is also disenfranchising executives and the workforce – the people who have real expertise and are the cornerstone of business success.

“Another tectonic fault is that the institutions and advisers which oversee the code… do not themselves adhere to the rules they impose on others.”

He added, “A core problem is that CG institutionalises short-termism, inexperience and navel-gazing.”

“In summary, my view is the UK CG system is up the spout – and is itself a threat to listed companies – and therefore to the UK economy.”

He also singled out PIRC’s boss, Alan MacDougall, saying, “MacDougall has questionable personable judgement, referring to himself on his Twitter account as a ‘governance expert’ and an ‘ex-Eurocommunist’.

“In my opinion, many people equate communism with fascism, since millions of Europeans perished or were imprisoned under its yoke.”

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