…as its boss survives a crucial vote on controversial pay plan
DSG yesterday succeeded in passing a resolution at its annual meeting, asking shareholders to pass a share option that would enable directors to sacrifice up to 25 per cent of their salaries in exchange for options worth £3 for every £1 they contribute.
The scheme will allow chief executive John Browett to replace a quarter, or £167,000, of his £670,000 salary with shares vesting in three years time. DSG’s top 90 executives will also have the chance to swap 15 per cent of their base salary for share options.
Shareholder body Pirc had argued that the option was not adequately related to performance and targets under the scheme were not “sufficiently challenging”.
The Association of British Insurers (ABI) had also issued an “amber-top” report, saying the proposal constituted a breach of its guidelines on corporate governance practice and arguing that the salary sacrifice proposal “was not the norm”.
But DSG’s biggest shareholder Standard Life, which has a 12 per cent stake in the electricals retailer, backed the resolution and the scheme was voted in with 87.2 per cent, while 12.8 per cent voted against the deal. Another 49.8m votes withheld in a sign of investor discontent, out of a total 338.7m votes cast.
A DSG spokesman said: “The share options mean that if the company’s share price goes up in three years executives will make money, if it doesn’t – they don’t. It’s an incentive.”
Browett, who was poached from Tesco in 2007 to replace John Clare, is currently steering the group through a recovery process after the downturn severely dented sales.