The restaurant group, owner of the wagamama and frankie & bennys chains, has suffered a major shareholder revolt over the proposed pay package of its new chief executive, after a difficult year in which it laid off thousands of staff and closed hundreds of sites.
The company on thursday said investors had approved its revised pay policy but more than a third of investors voted against it, putting it among the most significant shareholder rebellions this year.
Andy hornby, the former hbos chief executive who took up his role the restaurant group last year, waived his annual bonus and took a 40 per cent pay cut as a result of the pandemic.
But under the new plan, mr hornby qualifies for a 787,500 share award on top of his reduced base salary, which could push his maximum salary to 1.2m in 2020.
Next year, he will be in line to receive a 945,000 cash bonus as well as 630,000 in shares, pushing his potential total pay packet to 2.2m.
Debbie hewitt, chairman of the restaurant group, defended the pay policy, telling the financial times that the company felt a stock-based package was the best route [so] management wouldnt benefit from a windfall ltip [long-term incentive plan].
In a statement after the vote, ms hewitt said: the 2020 award will only vest in full in three years time if the underpins are achieved...in the short term the senior team continue to take pay cuts while the company is still making use of the governments job retention furlough scheme.
Executive pay has become a point of contention in the wake of the pandemic as companies, particularly across the hospitality and retail sectors, have cut dividends and tapped shareholders for support.
The restaurant group has accelerated its plans to cutting the number of its venues, closing roughly 230 underperforming sites and reducing its rent bill through a company voluntary arrangement. it has also laid off about 4,200 staff.
The wagamama owner this week also noted that trading was unlikely to improve in the near term, given the recent tightening of restrictions on the hospitality sector and the lack of footfall in airports, prompting closures in its concessions business.
It posted a statutorypre-tax loss of 235m in the six months ending in june, compared with an 88m loss the year before, while revenues more than halved to 227m.
The outlook is very uncertain. we will clearly be facing regional lockdowns over the next three to six months so we will have to continue to manage very flexibly, mr hornby said on tuesday. he did not rule out further job cuts.
Glass lewis, the shareholder advisory company, said ahead of thursdays vote that it had severe reservations about the proposed pay scheme, in light of the continued shareholder and wide workforce experience during the pandemic.
Additional reporting by attracta mooney