Marc Bolland was abruptly ordered out as chief executive of Wm Morrison yesterday, two months earlier than he had planned to go.
Mr Bolland is set to take the helm at Marks & Spencer but could have to wait up to a year to take on his new job. His Morrison’s contract allows for 12 months’ gardening leave.
The Morrisons board had found it increasingly difficult to discuss strategic decisions or sensitive plans while Mr Bolland remained, it is understood. While Morrisons and M&S are not direct competitors, they both have multibillion-pound food businesses.
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Morrisons said last month, when Mr Bolland was appointed to the M&S job, that he would not go on gardening leave and would continue to work as normal.
Mr Bolland, 50, is expected to earn £5 million as a result of his switch to M&S. He earns £850,000 at Morrisons and M&S is likely to compensate him for the loss of up to £4 million of Morrisons share options.
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In a statement to the stock market yesterday Morrisons said: “The senior management is focusing on plans and operations for the new year. It was therefore agreed at a scheduled board meeting yesterday that it would be appropriate for Marc Bolland to relinquish his operational responsibilities with effect from today.”
Mr Bolland had said that he would remain fully involved in the business until his planned departure early next year. Speaking the day after his M&S appointment he said: “I’m totally committed to the business to the last minute.” Mr Bolland and M&S declined to comment.
Discussions between Mr Bolland and Morrisons over his leaving date are understood to have begun only this week because the former Heineken executive was keen not to destabilise the retailer.
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Sources had expected Mr Bolland to be able to begin working at M&S in May. Contractual negotiations and yesterday’s announcement will not enable him start work any earlier but a source close to Morrisons said that an amicable agreement was likely.
Mr Bolland’s departure leaves Morrisons without a chief executive. Sir Ian Gibson, Morrisons’ chairman, also chairs the executive board but has not formally taken an executive role. He said: “Morrisons has a strong and capable senior management team which will continue to operate the business.”
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Mr Bolland’s appointment to M&S shocked the Morrisons board and forced them into a rushed announcement in mid-November.
It is possible that M&S will want to wait until a tranche of Mr Bolland’s share options vest in May before he officially takes up his new role, so that it can avoid having to compensate him for forsaking the shares.
Shares in Morrisons dipped ¾p to 279¾p yesterday, while M&S rose 2¼p to 402¼p.