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Wm. Morrison Supermarkets plc Snaps Up Tesco PLC’s Old Finance Director

Morrison Supermarkets (LSE: MRW) unveiled Andrew Higginson as its Chairman elect today. He will join the company’s board later this year, and then take over from Sir Ian Gibson when he retires in 2015.

What with Justin King leaving Sainsbury and Philip Clarke moving on from Tesco (LSE: TSCO), there is certainly plenty of change at the top in the major supermarket chains at the moment.

morrisonsMore fuel for the price wars

Some readers may recall that Higginson has history with Tesco, having spent 15 years as a director there from 1997 to 2012. For much of that time, he was finance and strategy director, but he decided to move on when he was passed over for the role of Tesco CEO in 2011.

Higginson said today:  “I am delighted to be joining the Board of Morrisons. Whilst there are undoubted challenges in the industry at the moment, this is a fine business and I am looking forward to working with the great team at Morrisons who work hard every day to serve customers.”

Morrisons on the slide

Morrisons could do with a bit of retailing magic at the moment, as the ‘challenges in the industry’ have seen Morrisons’ shares slide from 260p at the start of this year to around 170p today. Its most recent annual results showed a £176m loss after property writedowns, and May’s trading statement revealed that like-for-like sales had fallen a whopping 7%.

Higginson’s appointment got a lukewarm reception this morning, with the shares down around 1% after the announcement. However, his arrival is likely to increase the pressure on Morrisons’ CEO, Dalton Philips, who has been in situ since 2010.

Morrisons has said that it would pay a dividend of at least 13.65p for the 2015 financial year, suggesting a prospective dividend yield of 8%. That may seem highly attractive but investors should be aware that yields of this level, more than twice the market average, are rarely sustainable for long, and the appointment of a new Chairman can sometimes herald a change in dividend policy.

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Stuart Watson has no position in any shares mentioned. The Motley Fool owns shares of Tesco.