Beleaguered department store Myer is considering making its executive remuneration strategy more performance based after registering investor backlash at its Annual General Meeting (AGM) last year.

In a letter to shareholders sent out on Friday, executive chairman Garry Hounsell said Myer was reviewing its remuneration framework to ensure it was “fit for purpose”.

“Changes will reward executives appropriately for material growth of the business; deliver equity to executives to drive an ownership culture; and will ensure we are able to attract, motivate and retain capable and experienced executives,” he said.

“Our remuneration framework should reward executives when they deliver.”

Myer has already made several changes to its board remuneration policies after receiving a first strike on director pay at its AGM last year.

29.41 per cent of votes last year’s AGM were against its remuneration report, leaving it open to a board spill motion if more than 25 per cent of shareholders vote against the report again this year.

In March, Myer reduced the fees of its non-executive directors from $150,000 to $120,000, following shareholder feedback.

Chairman’s fees were reduced from $350,000 to $300,000 and board members have agreed to increase their shareholding in the company over the next three years to the equivalent of one year’s fees.

However, while shareholders expressed feedback that the fixed remuneration of former chief Richard Umbers was too high, Hounsell said Myer had opted to grant new boss John King the same base rate.

“Whilst the incoming CEO’s fixed remuneration remains the same, the Board is confident that, following an extensive international search, the fixed component of the incoming CEO’s remuneration reflects both the current market and the depth of Mr King’s highly relevant experience,” Hounsell said.

The changes come amid continued criticism from Myer’s largest shareholder Premier Investments, which is currently negotiating with other shareholders on a plan to overthrow the current board.

At last year’s AGM Premier mobilised Myer shareholders to vote against the election of Hounsell and director Julie Anne Morrison, but failed on both accounts.

He did, however, claim the first strike on Myer’s remuneration report as a victory.

Lew is expected to either call an extraordinary general meeting to put up his own nominees for the board in the coming months, or wait until the next AGM to once again mobilise support.

Hounsell did not reference Premier or its chairman Solomon Lew in Friday’s letter, but reiterated his view that incoming chief executive John King and new chief merchandise officer Allan Winstanley, would be the foundation of a team that can turnaround the business.

“John and Allan represent a formidable and proven team, being two highly experienced executives who are committed to making Myer more relevant again, to improving the financial performance of the Company and delivering shareholder value,” he said.

Winstanley and King have worked together before at UK department store House of Fraser.

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