Myer cuts board fees, exec salaries

Myer approved a reduction in fees to its chairman and non-executive directors after shareholders delivered a ‘first strike’ against the department stores proposed Remuneration Report at last year’s AGM.

The reduction was made in order to remain in line with what companies of a similar size offer, while making changes to the way Myer’s chairman and non-executive directors are rewarded.

“It is important that we have a remuneration framework that focuses on improving the performance of the business and delivering shareholder value,” Myer chairman Garry Hounsell said in a statement.

“Our focus must remain on incentivising management for material growth in earnings and delivery shareholder value.”

The business reduced the chairman’s fee from $400,000 at the beginning of FY18 to $300,000, while reducing non-executive director’s fee from $150,000 to $120,000.

Myer chief executive John King is to be compensated a total of $1.2 million, though 75 per cent of this compensation is tied up in Myer share rights which will convert to ordinary shares after a three-year period, to create an immediate alignment between the desires of shareholders and those of King.

Executive pay structures are in the spotlight, after the Australian Shareholders Association last week said it will vote against the remuneration reports of at least eight high-profile corporations. JB Hi-Fi narrowly missed a first strike on Thursday, when 21 per cent of shareholders voted against adopting the 2018 pay structure, just under the 25 per cent needed to cause a first strike.

Myer said a renewed remuneration strategy will impact salaries across the entire executive team, while still offering rewards that are competitive in the global market through a balance of fixed and “at risk” remuneration.

King noted that he remains confident that, with the successful execution of the business’s Customer First Plan, the financial performance of the business, as well as shareholder value, will improve.

“Importantly, we can rebuild pride, confidence and relevance in Myer,” King said. “I strongly believe Myer’s best days are ahead and I look forward to a year of delivery, not promises.”

However, the announcement only served to rankle Premier Investments chairman Solomon Lew, who has called on Myer shareholders to spill the department store’s board.Lew described the board members as using the company as a “personal piggy bank”, and blamed their lack of retail experience Myer’s current predicament.

“It is Premier Investments’ view that the new CEO, Mr John King, and his management team need a new Board of directors to help them steer Myer out of danger,” Lew wrote in a letter to shareholders.

“Myer’s Board is constantly reacting after the event. Premier Investments has, over the past 14 months, consistently called out issues in advance. The current Myer board has refused to listen until it has simply been too late.”

Lew called for the removal of the Myer board earlier this month, though has seemingly stepped up his efforts in light of the upcoming Myer annual general meeting, which he sees as an opportunity for change.

“Supporting Premier Investments at the upcoming Myer AGM is one way we can regain control of our company from the banks and Myer’s failed Board of Directors,” Lew wrote.

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