Yahoo Finance MPs to scrutinise Toys R Us chief's salary bump
Toys R Us is to face further questions from MPs about a bumper pay increase for its UK chief executive a year before the retailer announced plans to shutter a quarter of its stores.
The Sunday Telegraph revealed that the company more than trebled the pay package for its former UK boss, Roger Mclaughlan, from £356,000 in 2014 to £1m in 2015 and another £1.3m for the year ending January 30 2016.
Last week the UK arm of Toys R Us confirmed plans to use a company voluntary arrangement (CVA) to close at least 26 of its shops, putting around 8,000 workers at risk of redundancy.
The retailer has already come under scrutiny from Frank Field MP after it emerged Toys R Us had waived £585.4m loans to a holding company in the British Virgin Islands.
Mr Field is still waiting for a response from Graham Barker, chairman of the retailer’s pension trustees, who is understood to have taken a week to respond and has sent his initial answers to the Pensions Regulator and Pension Protection Fund (PPF).
“We are still waiting for any response to our questions last week about the position of the pension scheme," said Mr Field. "We’ll also be writing for clarification of how the former UK director justifies what appears to be some last ditch, rich nest-feathering, tripling his own salary for two years just as the company was tumbling into this sorry state.”
The pensions lifeboat has enlisted PwC to advise them on Toys R Us's upcoming CVA vote on December 21. The PPF is thought to hold around 20pc of the creditors' votes, according to Sky News.
Toys R Us requires 75pc of its creditors, including landlords, to support the company voluntary arrangement at a vote four days before Christmas. If creditors do not back the plan Toys R Us is at risk of collapse.
A PPF spokesman said: ‘‘We are currently working closely with the trustees of the Toys R Us pension scheme given the current CVA proposals . The filing of CVA proposals means that an assessment period is automatically triggered for a pension scheme.
"However, this does not mean that the scheme, or its members, will be transferred into the PPF. Whatever the outcome of the CVA the pension scheme members can be reassured that they remain protected.”
