British high street retailer, WH Smith, has reportedly fallen in to a pay row with its investors over the company’s remuneration report and pay policy as the nation deals with an intensifying cost-of-living crisis.
Sources have reported that three of the main proxy advisers, who advise City shareholders before annual meetings, have indicated their disapproval for a £550,000 ($752,023) bonus to the company’s CEO, Carl Cowling.
It is expected that a majority of investors would be voting against both of the firm’s remuneration report as well as pay policy at the upcoming annual general meeting (AGM) next week.
With the protests, WH Smith may become this year’s first target of the ‘fat cat’ pay row, even while other listed businesses forecast restricted demands due to rising energy bills and other living costs.
WH Smith, one of Britain’s largest retail companies, had infuriated various institutional shareholders over its decision to not repay the money the retailer had received from the government’s furlough scheme while awarding a substantial bonus to Mr. Cowling.
Glass Lewis, a voting advisor, in a report addressed to clients, stated that while WH acknowledges that the firm has adopted certain measures of ensuring appropriate remuneration for executives, the decision of awarding bonus while the receipt of COVID-19 related government support availed last year has raised concerns.
It has recommended shareholders to vote against the company’s remuneration packages for 2021 as well as its future pay policy.
UK trade body Investment Association’s voting advisory service, IVIS, also issued the strongest warning possible, a red top alert, to WH Smith’s investors regarding the retailer’s latest remuneration report, stating that considering its acceptance of the furlough support as well as business rates relief, investors need to be satisfied with its overall COVID-19 response first.
A source close to WH Smith has claimed, however, that the firm's key shareholders are in support of its pay resolutions.
Institutional Shareholder Services (ISS), another global proxy adviser, recommended that shareholders refrain from the re-election of non-executive director, WH Smith, Maurice Thompson, telling its clients that his previous roles raised questions of board accountability and potential failures of governance and oversight.
Thompson was the chairman of Greensil Capital, a supply chain finance provider, until last year when the firm had collapsed under controversial circumstances.