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WH Smith has been hit by a massive shareholder rebellion, with more than half its investors failing to back payment of a £550,000 bonus to the retailer’s chief executive after it benefited from tens of millions of pounds in pandemic relief.
In the group’s second bloody nose from investors in two years, just over 53% registered their dissent on the remuneration report including those voting against and those withholding their votes. Just over 45% of votes cast were against the retailer’s plans at the annual shareholder meeting on Wednesday.
WH Smith has been a big beneficiary of taxpayer funds via furlough support and business rates relief through the pandemic.
The vote came after WH Smith said its chief executive, Carl Cowling, who has led the retailer since November 2019, was in line to receive a bonus of £550,000 on top of a salary of £550,000 for the year to September 2021, as well as benefits and pension payments worth £85,000, according to WH Smith’s latest remuneration report, a total of £1.18m.
From April, Cowling’s pay will rise to £600,000 with the potential to earn an annual bonus of £960,000 on top.
In January last year the FTSE 250 retailer delayed a £25,000 pay rise given to Cowling in July 2020 after investors expressed anger against the move.
WH Smith took £40m in business rates relief and £11m in payments from furlough schemes in the UK and elsewhere in the year to September 2021 according to its annual report. That was on top of £20m in business rates relief in 2020.
The company said that it thought Cowling deserved the pay rise, which was delayed until September last year, amid concerns over the top-up when workers had been furloughed and the value of its shares had fallen.
A spokesperson for the company, which has long been known for chunky executive payouts including handing former boss Kate Swann £9m after her final year, said there were no plans to alter its pay award for Cowling.
“Despite being among the businesses hardest hit by the pandemic, WH Smith has emerged in a strong position and anticipates a return to profit in 2022,” it said. “This is as a result of the hard work of all our people, led by our executive directors.
“The remuneration arrangements published in our annual report and accounts are consistent with the remuneration policy which over 98% of shareholders supported in 2019 and come alongside the award of bonuses to approximately 1,750 colleagues across our stores and head office to recognise their exceptional efforts through the pandemic.”