Whitbread faces wage revolts despite bosses’ decision to forego bonuses | business news

The owner of hotel chain Premier Inn is facing a second straight year of pay rise after voting advisers opposed his decision to hand out bonuses to executives despite receiving government support during the pandemic.

Sky News understands that Whitbread, the FTSE 100 leisure group, is in talks with leading investors aimed at staving off a significant revolt at its annual meeting later this month.

Whitbread shareholders have been urged by Glass Lewis, a proxy advisor, to vote against the compensation report, while the Investment Association’s IVIS voting service issued a red-top notice, its most forceful warning, saying the institutions “are at odds with the Company’s rationale would have to be satisfied for…bonus payouts”.

The robust stance on Whitbread comes despite Alison Brittain, its chief executive, who voluntarily waived a £729,000 deferred payout after deciding it would be inappropriate to take it in connection with furlough payments and other government supports, that the company receives.

The hotel operator also reduced bonuses for the year by 25% to reflect the fact that it only received vacation pay in a quarter of its fiscal year.

ISS, another leading adviser to shareholders on AGM voting, has yet to give its verdict before the meeting, although a recommendation similar to that of Glass Lewis and IVIS would likely mean a fierce protest vote.

Last year’s Compensation Report was endorsed by less than two-thirds of shareholders.

People close to Whitbread said the recovery of the dividend during the fiscal year, the limited period that the company had accessed government assistance and the use of forfeited executive bonuses to set up a hardship fund for other members of the workforce had all calmed investor unrest.

The company’s financial performance has also recovered strongly since the series of COVID-19 lockdowns in the UK and Germany, its key operating markets.

“Whitbread’s compensation system aligns the interests of management with stakeholders”

A Whitbread spokesperson said: “Following a detailed review, which carefully considered shareholders’ views in the consultation process, the Compensation Committee remains of the opinion that the overall compensation structure of Whitbread aligns the interests of management with all stakeholders.”

Glass Lewis recommends that investors take a binding vote on Whitbread’s compensation policy, citing “no material concerns”.

While the vote on the payroll report is non-binding, a major rebellion would be uncomfortable for one of Britain’s best-known companies during a national cost-of-living crisis.

It would also highlight the ongoing tensions between blue-chip executives and investors at a time when companies’ ratios of top wages to average workers are under renewed scrutiny.

Continue reading:
The Premier Inn owner reports that Omicron has taken bookings and says room rates will increase if costs go up (January).

Many FTSE 100 Chairmen believe they are now at a disadvantage when trying to hire high quality executives because of the pressure on compensation packages.

A recent meeting between senior board members and institutional investors underscored the growing disconnect between the two sides, according to those present.

Companies as big as GlaxoSmithKline have seen major revolts this year, while British Airways owner International Airlines Group faces a similar prospect later this month.

Whitbread faces wage revolts despite bosses’ decision to forego bonuses | business news

Source link Whitbread faces wage revolts despite bosses’ decision to forego bonuses | business news

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