Troubled tech giant Micro Focus is set to face "stiff questions" from investors after top execs were handed payouts worth £60m four months ago.
Shares in Britain's biggest technology firm crashed over 50 per cent this morning after it delivered an unexpected warning on revenues and the exit of chief executive Chris Hsu.
Last November executive chairman Kevin Loosemore pocketed £24m, making him one the FTSE 100's best-paid execs. The remuneration came as part of Micro Focus' $1.2bn takeover of Attachmate in 2014 and also handed three other execs awards worth tens of millions of pounds.
In the wake of this morning's announcement and associated share price movement, City A.M. understands the company is considering recent pay awards with a firm decision yet to be made.
“Any discussions over clawbacks have to focus on whether shareholders (and the remuneration committee feel they wish to and if so whether they can," said AJ Bell investment director Russ Mould.
Micro Focus' 2017 accounts state pay awards are subject to clawback in the event of "material misstatement of the results, an error in calculation, fraud and gross misconduct, conduct leading to serious harm to the group’s reputation or a significant financial loss or a material failure of risk management".
Given today's statement makes no suggestion of impropriety or anticipates any big impairment charge, Mould said it would be hard for shareholders to recoup awards. Instead, it may come down the remuneration committee to decide whether the money should be returned.
It is now up to Loosemore and [new CEO Stephen] Murdoch to make the deal work and get Micro Focus back on track, or they will start to face some stiff questions over strategy and therefore pay.