Wetherspoon boss Tim Martin has launched a blistering attack on “up the spout” City rules arguing they have caused firms to go bust and pose a threat to the UK economy.
The vocal anti-EU businessman 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.
On the business itself, the stock market statement revealed sales were up 5.3% in the 13 weeks to 27 October on a like for-like basis, with one pub opened and four shut.
It also said JD Wetherspoon aimed to open up to 15 pubs in the current financial year.
On the business itself, the statement revealed like-for-like sales were up 5.3% in the 13 weeks to 27 October
But Mr Martin mainly used the update to express 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.
Mr Martin 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.”
He concluded: “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.”
Mr Martin also turned his fire on Wetherspoon’s largest institutional investor, Columbia Threadneedle, over its decision to not support the re-election of two non-executives at last year’s annual general meeting.
“As a result, three of our four NEDs felt compelled to offer their resignations – inevitably destabilising the company in the process,” he said.
But he reserved his strongest criticism for the corporate governance advisory group, Pensions & Investment Research Consultants (PIRC), which recommends to institutional investors how best to vote at annual general meetings.
PIRC is advising shareholders to oppose the company’s annual report, citing “potential political expenditure concerns”.
Mr Martin said: “Amazingly, while advising Wetherspoon that it should have four or five ‘independent’ NEDS, the hypocritical PIRC has, itself, just one on its own board – someone whose only apparent employment experience has been at a local authority.”
He also singled out PIRC’s boss, Alan MacDougall.
The Wetherspoons founder said: “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.”