WH Smith faces a revolt from investors after it was announced boss Carl Cowling was in line for a £550,000 bonus despite the firm not paying back government support received during the pandemic, according to reports.
Three of the main advisers which offer guidance to City shareholders ahead of annual meetings have signalled their opposition to chief executive Carl Cowling’s payout, Sky News’ Mark Kleinman first reported.
The retailer has reportedly infuriated shareholders with its decision not to repay furlough money taken on through the pandemic but press ahead with the bonus, and a substantial number of investors are now expected to vote against the company’s remuneration report at its annual general meeting next Wednesday.
Voting advisor Glass Lewis wrote to clients in a report: “While we acknowledge that the company has taken certain measures to ensure the appropriateness of executive remuneration outcomes in the context of the broader stakeholder experience, we remain concerned by the decision to pay annual bonus awards to executives given the receipt of COVID-19 related government support during the year under review.
“In line with market best practice expectations, we consider it inappropriate for executives to receive bonus awards where funds of this nature have been availed of but not repaid, as was the case here.”
The push back over Cowling’s payout is the latest in a spate of disputes between the firm and its investors over executive pay. In November 2020 the retailer was forced to backtrack on plans to award Cowling with £4.5m in shares, while last year a third of investors voted against the company’s remuneration report.
A WH Smith spokesman defended its policy on executive pay, telling Sky News: “Despite being among the businesses hardest hit by the pandemic, WH Smith has emerged in a strong position and anticipates a return to profit in 2022.
“This is as a result of the hard work of all our people, led by our executive directors.
“The remuneration arrangements published in our annual report and accounts are consistent with the remuneration policy which over 98% of shareholders supported in 2019 and come alongside the award of bonuses to approximately 1,750 colleagues across our stores and head office to recognise their exceptional efforts through the pandemic.”