Can anyone stop these three companies paying 'excessive' wages?

As millions struggle during the cost-of-living crisis, chiefs at a number of companies are receiving huge salaries and incredible bonus cheques. Will this trio get away with it?

A £9.1 million pay package for Playtech (LSE:PTEC) boss Mor Weizer means the FTSE 250-listed gaming technology firm faces shareholder discontent at another of its AGMs.

Despite the company making changes to its pay policies following a series of protest votes, advisory firm Glass Lewis remains unhappy with the “excessive” amount paid to Weizer after the vesting of a 2019 long-term incentive scheme.

Trainline (LSE:TRN) also faces a testing AGM following changes to its remuneration policy, while semiconductor wafers firm IQE (LSE:IQE) is under the spotlight because of recruitment awards handed to its new boss Americo Lemos.

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Trainline

When: 10am, Thursday 30 June.

Where: 120 Holborn, London, EC1N 2TD.

How to participate: Proxy voting forms must be returned no later than 10am, Tuesday 28 June. Questions for the board can be sent in advance of the AGM to investor@trainline.com. More AGM details are available here.

Who’s in the chair? Brian McBride was chair of ASOS from 2012 to 2018 and chief executive of Amazon.co.uk from 2006 to 2011.

How did the company do in the year to 28 February? Net ticket sales recovered to £2.5 billion, a rise of 222% year on year and 68% higher than 2020. Group revenues lifted 181% to £189 million, meaning adjusted earnings improved to £39 million from the previous year’s £25 million loss. The bottom-line loss per share narrowed to 2.49p.

How have shares performed? Down 60.6% to 203.6p (290.7p on Thursday). 

How much is the boss paid? Jody Ford’s salary of £575,000 is subject to review later this year. His total remuneration for 2021/22 amounted  to £1.57 million, including cash and shares worth £959,000 after Ford achieved 83.4% of his annual bonus opportunity.

Why's the remuneration policy being changed? External developments, such as Covid and the Williams-Shapps plan for rail, have weighed heavily on Trainline’s share price. The impact on existing incentive schemes means no payments are expected in the five years since the 2019 IPO. As well as remuneration outcomes far below peers, this leaves the chief executive with no effective long-term compensation scheme and very little shareholding.

What’s changing in the policy? The maximum opportunity under the long-term performance plan for 2023 will be 550% of salary, with 250% of this being the core award and 300% from a “kicker” award based on the delivery of exceptional financial returns. The kicker element reduces to 100% in 2024 and 2025, making the maximum in those years 350%.

What’s the view of voting agencies? Glass Lewis calls the potential 550% long-term bonus  opportunity for 2023 as “excessive relative to peers” and recommends shareholders oppose the binding vote on the new remuneration policy. It supports the advisory vote on the annual remuneration report.

How did last year’s AGM go? The annual remuneration report was backed with 97.7% of votes in favour.

How’s the company doing on diversity? There were two female directors at the end of February, representing 28.6% of the board. It does not meet the Parker review recommendation for a director from an ethnic minority background. McBride, who chairs the nomination committee, said the company supports both the gender-focused Hampton-Alexander review and the Parker review “wholeheartedly”. He added: “The committee recognises that technology is a male-dominated sector and that despite progress being made the group must continue to strive to achieve its diversity and inclusivity goals.”

Playtech

When: 10am, Thursday 30 June.

Where: Ground Floor, Midcity Place, 71 High Holborn, London WC1V 6EA.

How to participate: Proxy voting forms need to be returned no later than 10am on Tuesday 28 June. More AGM details can be found here.

Who’s in the chair? Brian Mattingley, who was chief executive of 888 Holdings (LSE:888) from 2012 and its non-executive chairman from March 2016 until 2021.

How did the company do in 2021? The gambling technology company grew revenues by 11% to 1.2 billion euros (£1 billion), aided by strong demand from retail and online operators in Latin America. Adjusted earnings improved 25% to 317.1 million euros (£272.5 million) and earnings per share jumped to 40.9 cents (35.13p). There was no dividend.

How have shares performed? Up 82.5% to 732.5p (528p on Thursday).

How much is the boss paid? Mor Weizer’s salary was reduced to £800,000 in 2021, from £1 million the previous year, as part of a series of measures aimed at addressing shareholder dissent at previous AGMs. His salary has been increased for this year by 2% to £816,000. Weizer’s total remuneration for 2021 came to £9.1 million as a one‐off incentive scheme approved in 2019 partially vested with a value of £5.1 million, which reflects shares beating targets of £6 and £7. The overall remuneration figure also included a short-term bonus of £1.6 million and £1.44 million from an annual long-term incentive scheme.

What happened at last year’s AGM? The new remuneration policy was approved with 75.47% of votes in favour, while the annual remuneration report got 69.18%. In 2020, the remuneration report had 56.7% of votes against.

What’s the view of voting agencies? Glass Lewis believes the pay-out to Weizer under the one-off incentive scheme is “excessive” and recommends shareholders vote against the annual pay report. It highlights that 45% of votes were against the one-off award at the 2019 meeting and said the company’s response to recent AGM dissent had been insufficient.

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What’s the company view? Remuneration committee chair Ian Penrose said Playtech had worked hard over 18 months to improve corporate governance and introduce a pay for performance culture. It has also materially reduced fixed pay and pension contributions. He added: “We believe that this has had a significant positive impact on the financial performance of the business, and on delivering initiatives to materially improve shareholder returns.”

How’s the company doing on diversity? The percentage of female directors was unchanged in 2021 at 28.6%. It has not disclosed its progress towards meeting the Parker review target for one director from an ethnic minority background by 2024.

IQE

When: 9am, Tuesday 28 June.

Where: Peel Hunt, 7th Floor, 100 Liverpool Street, London EC2M 2AT.

How to participate: Those attending via a live webcast will need to cast their votes in advance of the meeting by submitting a proxy vote. The deadline for doing so is 9am, 24 June. More AGM details can be found here.

Who’s in the chair? Phil Smith was previously chairman of Cisco in the UK, having previously spent eight years as chief executive.

How did the company do in 2021? The semiconductor wafer products business reported revenues of £154.1 million, a fall of 13% partly caused by a currency headwind of £10.6 million. Profitability in the wireless and photonics segments reduced as a result of increased under-utilisation of manufacturing capacity. The loss for the year increased to £31 million and the loss per share to 3.87p.

How have shares performed? Down 53% to 34.55p (32.2p on Thursday).

What’s the new boss paid? Americo Lemos, who took the helm in January, is on a salary of £575,000. His recruitment arrangements include a £1 million buyout award in respect of remuneration foregone at his previous employer GlobalFoundries. This comprises a cash bonus of £800,000 and an award of shares worth £200,000. The buyout award is not subject to any performance conditions, though malus and clawback provisions apply.

On joining, he was granted an exceptional award under the long-term incentive scheme equal to 200% of his salary. His maximum opportunity under the annual bonus scheme is 120% of salary. Dr Drew Nelson, his predecessor and IQE’s co-founder, who ran the business from 1999, received total remuneration of £520,000 after no bonuses were paid in relation to 2021 performance. He got a total of £1.1 million the previous year.

What’s the view of voting agencies? Glass Lewis is concerned that the recruitment award granted to Lemos is not subject to performance conditions. It also questions the decision to make an exceptional award under the 2022 long-term incentive plan without a compelling rationale. It recommends shareholders oppose the advisory vote on the remuneration report.

How did last year’s AGM go? The annual remuneration report was backed with 98.57% of votes in favour.

How’s the company doing on diversity? The board composition at the end of 2021 was 29% female.