Capital & Counties’ chief executive, chief financial officer and executive director have seen their pay frozen and bonuses missed after a tough year for the Covent Garden owner in the face of the Covid-19 pandemic.
All eligible staff outside of the board have been given salary increases and bonuses, said remuneration committee chair Charlotte Boyle in the company’s 2020 annual report, “albeit at moderated levels compared with previous years”. But, she added: “Recognising the impact of the pandemic and the uncertain economic environment, the committee has decided not to award any increases in annual salary to the executive directors”.
That leaves the salaries of chief executive Ian Hawksworth for 2020 and 2021 at £640,000; of finance boss Situl Jobanputra at £425,000; and of executive director Michelle McGrath at £345,000.
A total shareholder return of -44.3% and underlying earnings per share of -0.7p meant the financial threshold targets for the company’s annual bonus scheme were missed.
Boyle said that the personal performance of Hawksworth, Jobanputra and McGrath had been “extremely strong” during 2020, and their meeting of non-financial targets could still have resulted in a bonus. However, she added: “The committee felt that the payment of any bonus in relation to this exceptional year was, regrettably, not appropriate, taking into account the impact of Covid-19 on shareholder returns and our wider stakeholders.”
Capco’s remuneration policies have come in for criticism from shareholders in recent months. Last May, almost 68% of shareholders at the company’s annual general meeting voted against the remuneration report. Capco said after the meeting that it would “engage with shareholders” on any concerns.
Boyle said in the 2020 report: “Following the AGM, the chairman and I have actively engaged with shareholders representing over 80% of the share register to understand their concerns with both the 2019 report on remuneration and the remuneration policy… As a result we have subsequently agreed some important changes to the operation of the policy.”
Those changes include the introduction of a new post-cessation shareholding requirement for executive directors at the level of 200% of salary; an increase in the amount of bonuses that will be deferred to 40%; a new limit on the maximum bonus awarded to new recruits, set at 150% of salary; and a widening of the comparator group for the company’s Performance Share Plan from seven companies to all 19 REITs in the FTSE 350.
“The committee believes that these amendments to the operation of the approved remuneration policy have addressed the concerns raised by shareholders,” Boyle said. “Overall, the policy continues to support the delivery of appropriate, proportional outcomes that are aligned with shareholder returns and incentivises balanced decision-making to deliver the corporate strategy.”
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