Interactive Investor

Row looms over FTSE 250 firm’s big pay increase

A second pay showdown of the year looms at Vistry, but the AGM of Halfords should be calmer after the retailer cut the variable pay of its chief executive.

18th August 2023 09:57

by Graeme Evans from interactive investor

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A new and more lucrative pay deal for the boss of Vistry Group (LSE:VTY) has left the housebuilder facing a potential second showdown with shareholders in just over three months.

The updated remuneration policy, which increases the annual opportunity for chief executive Greg Fitzgerald to £5.6 million, goes before shareholders at a special meeting on 30 August.

But voting advisory firm Glass Lewis recommends voting against the resolution as it regards the increase in the package as “excessive” and more in keeping with the FTSE 100 rather than the company’s FTSE 250 peers.

Vistry, which has made the changes to reflect its increased scale since a merger with Countryside Partnerships, suffered a big rebellion at its May AGM after applying discretion to the vesting of Fitzgerald’s long-term incentives.

At other shareholder meetings, Halfords Group (LSE:HFD) is unlikely to get a rough ride from shareholders after it applied discretion to reduce the payout for chief executive Graham Stapleton.

Watches of Switzerland

When: 3.30pm, Thursday 31 August.

Where: The Watches of Switzerland Group, 36 North Row, London W1K 6DH.

How to participate: Proxy voting instructions need to be returned no later than 3.30pm, Tuesday 29 August. More AGM details can be found here.

Who’s in the chair? Former Hilton International chief executive Ian Carter was appointed in November 2020.

How did the company do in the year to 30 April? Revenues rose 25% to £1.54 billion, driven by a 52% increase in the US to £653 million, as the luxury watches retailer benefited from increased average selling prices and volume growth. Adjusted earnings rose by 26% to 52.7p per share, with bottom-line profits up 23% to £155 million. There was no dividend.

How have shares performed? Down 18% to 831.5p (702p on Thursday).

How much is the boss paid? Brian Duffy’s base salary has stayed at £500,000 after executive directors elected not to receive October’s increase in order to prioritise pay rises for lower paid workers. Duffy’s single figure remuneration of £3.6 million included cash and shares worth £562,500 after the annual bonus scheme paid 75% of the maximum opportunity. The 100% vesting of long-term incentives granted in September 2020 contributed £2.5 million, including £1.5 million from share price appreciation over the three-year period. The salary of new finance chief Anders Romberg is unchanged from the previous incumbent at £380,000.

How did last year’s AGM go? The annual remuneration report received 97.38% of votes in favour, while the new three-year remuneration policy got 98.15% support.

What’s the view of voting agencies? Glass Lewis recommends shareholders vote in favour of the annual remuneration report.

How’s the company doing on diversity? There are three female directors accounting for 42.9% of board roles. Watches of Switzerland Group (LSE:WOSG) is in line with the Parker Review on ethnic diversity.


When: 3pm, Wednesday, 6 September.

Where: Halfords Support Centre, Icknield Street Drive, Washford West, Redditch B98 0DE.

How to participate: Proxy voting instructions need to be returned no later than 3pm, Monday 4 September. More AGM details can be found here.

Who’s in the chair? Former British Airways chief executive Keith Williams was appointed in July 2018. He holds the same role at Royal Mail owner International Distributions Services.  

How did the company do in the year to 31 March? Revenues rose 15.3% to £1.59 billion, an increase of 39.5% over the pre-pandemic year of 2020 as the company reported market share gains across motoring, tyres, servicing and cycling. Significant cost headwinds and investment in pricing meant underlying profits dropped 42.7% to £51.5 million and basic earnings per share by 58.8% to 15.6p. A final dividend of 7p a share is due to be paid on 15 September, resulting in an 11.1% increase in the total for the year to 10p.

How have shares performed? Down 29% to 174.8p (185.4p on Thursday).

How much is the boss paid? Graham Stapleton’s salary increased in October by 4% to £598,738. His total remuneration of £1.19 million for 2022/23 was subject to downward discretion after the remuneration committee considered the wider stakeholder experience and those staff who received no bonus due to a profit threshold being missed. The revisions   meant Stapleton got no annual bonus rather than 23.75% of the maximum, with the 60.6% vesting of long-term incentives reduced to 50% for a value of £489,255. 

What’s in the new remuneration policy? No major amendments are planned for the new three-year policy after the last one received strong support at the 2020 AGM. The maximum incentive opportunities will remain at 150% of base salary for the annual bonus and 200% of base salary for the long-term incentive plan.

What’s the view of voting agencies? Glass Lewis recommends shareholders support the annual remuneration report and the binding vote on the new remuneration policy.

How did last year’s AGM go? The annual remuneration report was approved with 90.75% of votes in favour.

How’s the company doing on diversity? Women account for half of board roles. The company has a target to improve ethnic diversity at board and senior management level by December.

Vistry (General Meeting)

When: 10am, Wednesday 30 August.

Where: Linklaters, One Silk Street, London EC2Y 8HQ.

How to participate: Questions to will be answered during the meeting. The deadline for proxy voting instructions is 10am, Friday 25 August. More details can be found here.

Who’s in the chair? Former Marston’s CEO Ralph Findlay, who joined the board in 2015.

Why is the company holding a general meeting? The Bovis housebuilder has updated its remuneration policy in order to reflect its increased scale since last year’s combination with Countryside Partnerships. Shareholders are required to approve the new policy and amendments to the long-term incentive plan and the deferred bonus plan.

What’s in the new policy? The maximum opportunity under the annual bonus and the long-term incentive plan will be increased to 300% of base salary, up from the current levels of 150% and 200% respectively. The salary of Greg Fitzgerald will also be increased by 5.9% to £800,000, representing a total rise of 10.2% from 2022. This means his highest potential remuneration under the proposals will be £5.6 million.

What performance criteria are being used? Payouts will be subject to the achievement of stretching performance conditions and “ambitious” growth targets. The company intends to review the metrics during 2024.

What’s the view of voting agencies? Glass Lewis recommends shareholders vote against the new remuneration policy and amended long-term incentive plan, but in favour of the resolution on the deferred bonus plan. It says the proposed salary and opportunity levels would appear to align the CEO's pay package with the FTSE 100 rather than FTSE 250 peers. The agency also highlights the need for better disclosure of the benchmarking process, particularly the peers used and level of remuneration targeted.

What’s the company say? The housebuilder points out that it is now a significantly larger and more complex business. Remuneration committee chair Paul Whetsell adds: “We are taking decisions we believe will drive the performance of the business through motivating and retaining key talent as we enter into a critical juncture of growth for the business and seek to maximise long-term value for our shareholders.”

How did this year’s AGM go? The remuneration report was nearly defeated, with 47.08% of votes against. The discontent came after Fitzgerald got £551,000 from the vesting of long-term incentives (LTIP), taking his overall pay to £2.48 million. A third of the award was calculated based on earnings per share, which the Bovis owner measured on just 2022 performance rather than the usual three years. The discretion by the remuneration committee came after previous awards were disrupted by the pandemic. It said the vesting level was appropriate given a strong financial performance and aligned with shareholder experience.

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