Home furnishings chain Dunelm is under pressure over a £4 million pay package for its boss amid accusations that the deal is “excessive”.
Influential shareholder advisory group Pensions & Investment Research Consultants (Pirc) has advised investors to vote against the firm’s pay plans at its annual general meeting on November 16.
It comes after Dunelm’s annual report recently revealed that chief executive Nick Wilkinson saw his total pay more than quadruple to £4.04 million for the year to June, from £959,000 the previous year, after picking up £3.4 million in bonuses.
The report showed that his pay was boosted as shares worth £2.8 million under a three-year long-term incentive scheme vested, while he also picked up a £570,000 annual bonus.
Pirc said: “The changes in the chief executive’s total pay over the last five years are not considered in line with the company’s financial performance over the same period.
“The ratio of the CEO’s pay compared to average employee pay is considered unacceptable, standing at 66:1.”
Dunelm’s finance head, Laura Carr, also saw her pay shoot up to £2.5 million from £496,000 the previous year, thanks largely to £2 million in bonus and long-term share payouts.
Both bosses also saw increases in their annual salaries after voluntarily taking pay cuts in the early days of the pandemic, with another 3.5% each from August 1, in line with wider pay rises across the group.
Dunelm has enjoyed booming sales amid the trend for Britons to splash out on their homes and gardens during Covid-19.
The group notched up a 44% jump in annual profits and recently reported further growth in first quarter sales – up 8.3%, or 48% higher on a two-year basis.
But the pay deal also risks stoking controversy as Dunelm has insisted it should not repay savings made from the business rates holiday, despite the profit boost and a £132 million payout to investors.
The retailer has repeatedly claimed it was right to enjoy the £22 million in tax savings, as its stores were forced to close during the pandemic.
Dunelm said in its annual report: “Management remuneration is performance-related and is calculated over multi-year periods in order to incentivise and reward sustained strong performance, and the majority is paid in shares.
“Two-thirds of the ‘single figure’ pay reflects a three-year period during which significant strategic progress was made through building our customer proposition, digital capability and our approach to climate change and sustainability, resulting in significant growth in our share price.”