Yahoo Finance Mothercare boss takes 22pc pay cut to return to the retailer
The re-instated boss of Mothercare has taken a 22pc pay cut to rejoin the embattled baby chain, but will still earn more than the executive parachuted in to replace him.
Mark Newton-Jones - who was sacked in April - will see his base salary slashed from £618,000 to £480,000 as he returns to the fold as chief executive.
However, he will pocket more than former Tesco executive David Wood, who was brought in as chief executive when Mr Newton-Jones was fired.
Mothercare announced this week that Mr Wood, who is on a base salary of £430,000, would be shifted to the role of group managing director to make way for Mr Newton-Jones.
The troubled company revealed a far-reaching rescue package on Thursday that will see it put 800 jobs at risk, axe 50 stores and pull together £113.5m funds to revive the business.
The push to bring down its 137-strong UK store estate to around 87 stores and secure rent reductions on a further 21 sites will be pursued through a Company Voluntary Arrangement (CVA), a type of insolvency process which helps firms cut costs.
Mr Newton-Jones owns around 733,576 shares in Mothercare worth £197,918. He spent four years attempting to turn the business around, but was ousted by non-executive chairman Alan Parker who retired last month.
The Telegraph understands that investors and lenders had expressed their desire for Mr Newton-Jones to be reappointed when interim executive chairman Clive Whiley sounded them out over the issue.
It is understood that Mr Wood will now focus his attention on delivering the CVA, while Mr Newton-Jones will take overall charge of restoring the retailer’s fortunes.
Mr Whiley, who was the driving force behind securing the rescue package, is understood to be on a nine-month contract and will be tasked with pinning down a permanent replacement once the retailer shows signs of stabilising.
It comes as Mothercare laid bare the monumental challenge facing the board on Thursday, with UK losses before tax ballooning to £79.4m, in contrast to a loss of £9.7m for the year before.
Focusing on the wider group, adjusted pre-tax profits crashed 88.3pc to £2.3m as worldwide sales fell by 4.8pc to £1.16bn.
A spokesman for Mothercare said: “In recognition of Mothercare’s financial position and the support for the restructuring and refinancing given by multiple stakeholders, Mark has taken a significant pay cut.
“Mark has a major role as part of the team to return to Mothercare to a more stable footing, accelerate the transformation of the Group and drive it towards a viable and sustainable future.”
