Interactive Investor

The FTSE 250 boss who blocked his own pay rise

18th November 2022 11:15

Graeme Evans from interactive investor

When inflation is in double-digits, most of us would welcome a salary increase, but not this chief executive. Graeme Evans explains why.

Dunelm has been frustrated in its attempt to hand a pay rise to respected boss Nick Wilkinson.

But it was not shareholders standing in the way — the hike was blocked by Wilkinson himself after he told the company’s remuneration committee to keep his salary at £582,125.

FTSE 250-listed Dunelm Group (LSE:DNLM) “reluctantly agreed” to Wilkinson’s request, having wanted to recognise his performance by boosting a salary that is low by peer group standards.

The move, which comes at a time of heightened cost-of-living pressures for Dunelm’s customers, was revealed in the company’s annual report. Wilkinson got total remuneration of £2.68 million in 2021-22, the bulk of which is shares based.


When: 11.30am, Wednesday 30 November.

Where: Dunelm's Store Support Centre, Watermead Business Park, Syston, Leicester, LE7 1AD.

How to participate: Voting instructions need to be returned by 11.30am, Monday 28 November. Questions submitted to will be answered after the AGM and posted on the company’s website. More AGM details can be found here.

Who’s in the chair? Former easyJet boss Andy Harrison is at the end of his nine-year tenure and is hosting his last Dunelm AGM. He is due to be succeeded by Alison Brittain, who stepped into his old role running Premier Inn owner Whitbread in 2015.

How did the company do in the year to 2 July? The homeware retailer’s sales of £1.55 billion were 41% higher than prior to the pandemic and 16.2% above 2021. Growth in pre-tax profits and earnings per share topped 30% to £209 million and 82.1p respectively, while free cash flow of £153 million represented 70% conversion of operating profit. The final dividend of 26p a share will be paid on 5 December, lifting the total for the year by 14.3% to 40p.

How have shares performed? Down 42% to 830p (949.5p on Thursday).

How much is the boss paid? Nick Wilkinson has turned down a pay rise for the 2022-23 financial year, leaving his base salary at £582,125. The remuneration committee had intended to reward Wilkinson for his strong performance, noting that his base salary is now at or below the lower quartile for his peers. The bonus opportunity of 125% of salary is also regarded as uncompetitive, but Dunelm is unable to improve Wilkinson’s potential profit-related pay until the remuneration policy is updated next year. The bonus for 2021/22 came to £653,045, which represented 90% of the maximum opportunity, and the full vesting of long-term incentives amounted to £1.38 million. Wilkinson’s total remuneration was £2.68 million, but with around 75% being in shares and two-thirds of these needing to be retained. Deputy executive chairman Sir Will Adderley, whose family control more than 42% of shares, is not paid a salary and asked not to be considered for a bonus award.

How did last year’s AGM go? Advisory group Pirc raised concerns about the firm's pay report due to the sharp increase in Wilkinson’s pay package to £3.7 million. However, the annual remuneration report was approved with 98.58% of votes in favour.

What’s the view of voting agencies? Glass Lewis points out that the £450,000 starting salary of new finance boss Karen Witts is about 13% higher than that paid to her predecessor. However, it recognises her experience as a chief financial officer of FTSE 350-listed companies Compass and Kingfisher and believes the salary is reasonable relative to peers. Glass Lewis recommends shareholders vote in favour of the annual remuneration report.

How’s the company doing on diversity? Dunelm meets the requirements of the Corporate Governance Code on diversity of gender and background. This includes 42% of the board and 43% of senior leadership roles being held by women.


When: 10am, Wednesday 30 November.

Where: New Mills, Wotton-under-Edge, Gloucestershire, GL12 8JR.

How to participate: After two years of Covid disruption, the company is inviting shareholders to attend in person this year. They are asked to register in advance by emailing Proxy voting instructions need to be returned no later than 10am, Monday 28 November. The deadline for pre-submitted questions has passed, but with the answers due to be published on the company’s website by Friday 25 November. More AGM details can be found here.

Who’s in the chair? Sir David McMurtry, who co-founded the business in 1973 with John Deer and continues to serve on the executive committee. He invented Renishaw (LSE:RSW)'s first product, the touch-trigger probe, to solve a specific inspection requirement for the Olympus engines used in Concorde. 

How did the company do in the year to 30 June? The high-precision metrology and healthcare technology group posted record revenues of £671.1 million, 19% higher than a year earlier. Adjusted profits also hit an all-time high of £163.7 million after a 37% increase, reflecting an improved return on sales rate of 24% from 21% the year before. Earnings per share rose by 41% to 185.5p and the company intends to pay a final dividend of 56.6p a share on 5 December, resulting in a 10% increase for the year at 72.6p.

How have shares performed? Down 29% to 3,568p (3,902p on Thursday).

How much is the boss paid? The base salaries of Sir David and chief executive Will Lee increased in July by 5% to £766,500 and £703,500 respectively. Lee, who joined the Renishaw graduate scheme in 1996 and has been in his current role since 2018, got a £1 million annual bonus in cash and shares based on the maximum opportunity. The company does not operate a long-term incentive scheme, meaning Lee’s total remuneration came to £1.77 million. Sir David’s cash bonus was capped at £730,000, taking his total to £1.46 million.

How did last year’s AGM go? The annual remuneration report was backed with 97.15% of votes in favour. More than 20% of votes were against the re-election of Sir David and deputy chair Deer, who are controlling shareholders owning 53% of the company. They have faced calls to provide greater protection to minority shareholders.

How’s the company doing on diversity? The proportion of women on the board is 25%. The company supports the FTSE Women Leaders Review (with a target of 40%), as well as the aspiration of ethnic diversity set out in the Parker Review (with a target of at least one director from a minority ethnic group by 2024). It adds that succession planning continues to be a key activity for the board, with a focus on diversity.

What’s the view of voting agencies? Glass Lewis recommends support for the annual remuneration report and the binding vote on remuneration policy, despite the latter containing no long-term strategy for remunerating executives. It continues to highlight governance and boardroom diversity concerns as reasons for opposing the re-election of Sir David, who is chair of the nomination committee. The issue of minority shareholder protection is also highlighted in relation to its opposition to Deer's re-election.

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