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The chief executive of WH Smith, Steve Clarke, is said to be facing a “pay revolt” at his first annual meeting this month, after institutional investors were issued with a warning about the company’s remuneration policies.
According to the Daily Telegraph, shareholders are being called to vote down the company’s remuneration report, after investor advisory group Pensions & Investment Research Consultants (PIRC) issued a note warning that parts of WH Smith’s pay policies are “not best practice”.
Concerns have been raised about Clarke’s incentive awards, the newspaper said, and the last pay deal awarded to former WH Smith boss Kate Swann, who left the retailer in June 2013.
PIRC criticised the “use of relative dividend payments as part of the company’s incentive scheme”, said that annual changes to criteria for executive pay schemes is not considered best practice, and recommended shareholders oppose the Remuneration Report, the Telegraph reported.
The group “has complained that Ms Swann has retained incentive awards rather than exercising them when she left the company”.
Swann was paid £525,000 annually when she was in post. Clarke is paid 8.7% less - £480,000 - after complaints from shareholders over executives’ bonuses. Clarke’s maximum bonus is £768,000 whereas Swann’s was £1.1m.
The Telegraph said that “PIRC has raised concerns about Mr Clarke’s incentive scheme which could potentially pay out 500% of the new boss’s salary”.
A spokesman for W H Smith said that the departure package for Ms Swann reflected her designation as a “good leaver” and had been “fully approved by shareholders”.