Troubled Kesa criticised for bonus payout

KESA ELECTRICALS, the owner of TV and computer retailer Comet, has been criticised for handing its boss a £1m bonus for a period in which its share price and UK sales fell.

Analysts described chief executive Thierry Falque-Pierrotin’s award as “sizeable” and said management was not doing enough to reassure investors that performance would pick up.

Falque-Pierrotin took home total compensation of £2.1m for the year to 30 April, including a base salary of £891,000 and a reward of £971,900, according to Kesa’s annual accounts.

His bonus was linked to pre-tax earnings, which bounced back from a loss of £81.8m to a profit of £69.6m. But questions were raised over the 6.2 per cent slide in Kesa’s share price, which fell to 125p over the year to April, and a 1.4 per cent drop in like-for-like sales at Comet.

One analyst, who asked not to be named, said: “The jury is still out on the management. Kesa has a fantastic business with Darty in France but the problem is Comet in the UK. They need to come up with a plausible plan for that business.”

Investors have particularly complained about scant details on Kesa’s preparations for combat between Comet and US technology retailer Best Buy, which opened its first UK store in Thurrock, Essex, in April.

Matthew McEachran at Singer Capital Markets said: “Management needs to be more transparent. In this environment, investors want to see what performance is being targeted – when management doesn’t do that it’s very easy for investors to get frightened because you can’t see the route map to improved profitability.”

In this context Falque-Pierrotin’s payout was “a sizeable amount”, McEachran added.
A spokesperson for Kesa said Falque-Pierrotin had met the remuneration objectives set by the board.