A board member of the under-fire interior designer favoured by the King threatened to sue the founder of its biggest shareholder in a tussle over pay.
Patrick Lewis, who sits on the board of London-listed Sanderson Design Group, warned the boss of LBV Asset Management against “potentially defamatory allegations” after he questioned the pay packets of the company’s executives.
LBV has been pushing to remove former National Lottery boss Dame Dianne Thompson, Sanderson’s chairwoman, over the design group’s drift towards “inaction and inertia”.
Sanderson Design Group holds a Royal Warrant and strong ties to King Charles III, and traces its history back to the arts and craft movement pioneer William Morris.
LBV, which owns 14 per cent of the design group’s shares, has sought to put the spotlight on the pay packets handed to the group’s executives following “years of poor performance”.
The group’s chief executive and finance chief, Lisa Montague and Mike Woodcock, were handed a combined pay packet worth £1.13m last year, equivalent to 36 per cent of the company’s pre-tax profit.
In a letter to Sanderson’s board, LBV said the 26 per cent shareholder vote against the firm’s remuneration report at its annual meeting was “clear evidence of dissatisfaction among shareholders when it comes to board and executive compensation”.
Shareholder ‘baffled’ by threat
Patrick Lewis, who is an independent non-executive director and chair of Sanderson’s remuneration committee, wrote back to Emmanuel de Figueiredo, LBV’s founder, to warn him “the allegations contained in your letter have the potential to cause serious damage” to the group’s executives.
In the letter, seen by City AM, he wrote: “My strong recommendation would be that you should not take any further steps to publish, circulate or repeat the allegations contained in your letter in their current form.
“I expressly reserve all of our rights and remedies available to us, including the right to seek legal advice and pursue such action as may be appropriate in respect of any defamatory statements that are published.
“I nevertheless hope that this will not be necessary and that any concerns raised by LBV can be addressed through proper and constructive engagement rather than through the publication of misleading and potentially defamatory allegations.”
Lewis has been a director at Sanderson since November 2021. Before joining the design group he served as finance chief of department store giant John Lewis, which he first joined in 1994.
‘They see us as troublemakers’
In LBV’s response to Lewis’s letter, de Figueiredo said it was “baffling” that he had interpreted his comments about Montague and Woodcock’s pay as “attacks on the executive management team”.
In the correspondence, the hedge fund boss wrote: “We categorically reject the characterisation in your letter that our comments amount, expressly or by implication, to an allegation that either executive is unsuitable for office and, therefore, defamatory or misleading in any way.”
LBV addressed Lewis’s threat in a circular sent to shareholders on Tuesday, saying: “A board that meets those legitimate views with the threat of legal action appears to believe its shareholders should not hold views of their own. They see us as troublemakers, rather than as stakeholders to be taken seriously.”
Sanderson’s investors have been called to an emergency meeting on 29 October to vote on LBV’s proposals to remove Dame Thompson and elect Stephen Brook as a director.
“LBV’s proposals risk significant disruption and uncertainty at precisely the point when the benefits of the group’s transformation are becoming increasingly evident,” Thompson has said to shareholders.
Sanderson Design Group and Lewis declined to comment.