Sainsbury family to rescue board

EMBATTLED supermarkets giant J Sainsbury looked set to survive an embarrassing shareholder rebellion today after a last-minute intervention by the founding family.

The Sainsbury family was believed to be lining up behind the retailer's board in its fierce row with investors over the now-scrapped £2.4m share award to former chairman Sir Peter Davis.

Institutions have vowed to vote against Sainsbury's remuneration report at today's annual general meeting in protest at the payout, which came despite falling profits and sales.

But the Sainsbury family, which holds a 38% stake in the business, will vote in favour to avoid further pain for the board. It is thought that it considered abstaining in a sop to institutions.

The move is unlikely to quell unrest among the hundreds of private investors due to turn up at the QEII Conference Centre and unleash their anger on new chief executive Justin King.

The National Association of Pension Funds and the Association of British Insurers are sticking to plans to vote against Sainsbury's pay report despite its decision to shelve Davis's share payout.

Both believe it is crucial to set a precedent.

ABI head of investment affairs Peter Montagnon said: 'There is a risk of the entire system of remuneration falling into dispute.'

Sainsbury's last week decided it could no longer support the payout following the downturn in trading that led to a severe profist warning a fortnight ago, its second in four months.