AGM alert: this bonus is FTSE 250 star boss’ biggest ever

A £1 million “exceptional bonus” has been awarded to the boss of Games Workshop after he oversaw another successful year at the FTSE 250-listed Warhammer figurines maker.

Kevin Rountree, who joined the business in 1998 as assistant group accountant, got a total of £1.8 million for his biggest annual remuneration figure since taking the helm in 2015.

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The bonus, which is equivalent to 150% of salary, is only awarded by the remuneration committee if “proven, exceptional performance” has been delivered. 

Games Workshop does not run a long-term incentive scheme, believing that the use of formulaic target setting goes against the culture of the business. Cash payments under the staff profit share scheme amounted to £6,000, up from £4,000 the year before.

Auto Trader

When: 11am, Thursday 19 September.

Where: 4th Floor, 1 Tony Wilson Place, Manchester, M15 4FN.

How to participate: Proxy voting instructions should be returned no later than 11am, Tuesday 17 September. More details about the Auto Trader Group (LSE:AUTO) AGM can be found here.

Who’s in the chair? Matt Davies, who is the former chief executive of Pets at Home, Halfords and Tesco UK, was appointed to the role following the 2023 AGM.

How did the company do in the year to 31 March? Revenues grew by 14% to £570.9 million, with operating profit up 26% to £348.7 million. Adjusted earnings per share increased by 8% to 29.37p. A final dividend of 6.4p a share is due to be paid on 27 September, resulting in a 1.2p increase in the total for the year to 9.6p.

How have shares performed? Up 14% to 700.2p (813p last Thursday).

How much is the boss paid? Nathan Coe’s base salary increased in July by 11.7% to £700,000. His total remuneration for 2023-24 amounted to £2.98 million, up from the previous year’s £1.28 million when long-term incentives did not vest. This year’s total included an annual bonus of cash and deferred shares worth £867,000, representing 92.2% of the maximum opportunity. The 96.9% vesting of long-term incentives granted in 2021 contributed £1.45 million to the overall figure. These shares must be retained for two years after their vesting.

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Why the big pay rise? The remuneration committee said incentive opportunities have not changed since the 2015 IPO and that recent base salary increases have been behind those for the wider workforce. This is despite growth in operating profit of 162% and market capitalisation increasing from £2.35 billion at the float to more than £6 billion. It believes the double-digit percentage increases for the company’s three senior executives give a better reflection of their roles and the current scale of Auto Trader. Even after the increases are applied, the company points out that base salaries are still below the lower quartile of the market peer group.

How else is the remuneration policy changing? As part of the move to a more competitive package, the CEO’s maximum award under the long-term incentive scheme will be increased by 50% of salary to 250%, or up to 300% of base salary in exceptional circumstances. Taken together with the salary increases, the maximum remuneration opportunities for executive directors still rank between lower quartile and median of the market peer group. The last binding vote on the company’s remuneration policy at the 2021 AGM got 99.69% support.

How was this year’s variable pay determined? The bonus was based 75% on adjusted operating profit, which came in £5 million short of the stretch target of £365 million. The rest was based on strategic milestones. On the long-term incentive scheme, operating profit growth of 13.8% and revenue growth of 13.4% for the performance period meant the maximum pay out under these elements. The remaining 12.5% of the award was linked to diversity progress.

How did last year’s AGM go? The annual remuneration report was approved with 95.91% of votes in favour.

How’s the company doing on diversity? Following the AGM, 67% of board roles and one of the senior positions will be held by women. Two directors are from a minority ethnic background.

Games Workshop

When: 10am, Wednesday 18 September.

Where: Willow Road, Lenton, Nottingham, NG7 2WS.

How to participate: Proxy voting instructions should be returned no later than 10am, Monday 16 September. More AGM details can be found here.

Who’s in the chair? John Brewis was appointed in January 2023, having joined the board in 2018. He has over 30 years’ experience of high-volume manufacturing, including as a divisional director at former Trinity Mirror business Reach.

How did the company do in the year to 2 June? Core sales were 11% higher at £494.7 million, while licensing revenues rose 22% to £31 million. The overall 12% improvement in revenues drove a 19% increase in pre-tax profits to £203 million and earnings per share 12% higher at 458.8p. Dividends paid and declared amounted to 420p, up from 415p the year before.

How have shares performed? Up 4% to 9,985p (10,250p last Thursday).

How much is the boss paid? Kevin Rountree’s base salary has increased by 7.4% from 1 January. This follows an independent benchmarking review by the remuneration committee and takes into consideration that executive directors did not receive a base pay annual increase in 2021-22 or 2022-23. In addition to his base salary of £739,000 for 2023-24, Rountree got an exceptional bonus award of £1 million. This took his total remuneration for the year to £1.8 million, the highest figure since he became chief executive in January 2015.

What about other staff? Cash payments under the group profit share scheme were made in December 2023 and May. For 2023-24 each eligible employee received a total of £6,000, up from £4,000 the year before and lifting the total to £18.4 million from £11.6 million.

What’s in the new remuneration policy? The company operates a simple structure made up of base pay, pension, benefits and exceptional bonus award worth up to 150% of salary in the case of the chief executive. This bonus is subject to the discretion of the remuneration committee if “proven, exceptional performance” has been delivered. Any variable, discretionary bonus is subject to a clawback provision and considers the wider stakeholder experience - that of shareholders and employees. 

Why the difference with FTSE 250 peers?Games Workshop Group (LSE:GAW) believes that formulaic target incentive setting within long-term incentive schemes goes against the culture of team effort and leadership that the company has thrived on to deliver consistent year-on-year growth.

How did last year’s AGM go? The annual remuneration report was approved with 89.1% of votes in favour.

How’s the company doing on diversity? There are currently two female board members, with the gender diversity level of 33% below the 40% set out in the UK Listing Rules. One director is from an ethnic minority background.

AO World

When: 9am, Wednesday 18 September.

Where: 5A The Parklands, Lostock, Bolton, BL6 4SD.

How to participate: The deadline for proxy voting instructions is 9am, Monday 16 September. More details about the AO World (LSE:AO.) AGM can be found here.

Who’s in the chair? Geoff Cooper, the former chief executive of Travis Perkins, was appointed to the board in July 2016.

How did the company do in the year to 31 March? Revenues of £1 billion were 9% lower, in line with expectations following strategic actions to remove non-core channels and loss-making sales. Adjusted profit of £34.3 million rose £22.3 million year-on-year, with a profit margin of 3.3%. Available liquidity improved to £116.4 million from £88.9 million.

How have shares performed? Up 56% to 100.8p (115p last Thursday).

How much is the boss paid? A 7% pay rise for chief executive and founder John Roberts has taken his base salary for this year to £546,174. The increase follows a FTSE 250-wide review which showed his salary positioned behind the market. His total remuneration amounted to £1.4 million, including cash of £503,791 after the AO incentive plan vested at 98.7%. The remaining two-thirds is payable in deferred shares, which will vest in July 2027 subject to employment and attainment of a performance underpin. Roberts will then be required to hold the shares for a further year. The year’s total figure also includes £352,006 from the vesting of deferred shares held under the 2021 scheme. Roberts had 105 million shares at the end of March, equivalent to 18.1% stake. Frasers Group is the largest shareholder with 24.4%.

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How was variable pay determined? Half of the incentive scheme is based on UK adjusted profit, which at £34.3 million delivered the maximum result. The rest is focused on average liquidity headroom, strategic transformation progress and customer and employee satisfaction.

How did last year’s AGM go? The annual remuneration report was approved with 98.16% of shareholder votes in favour.

How’s the company doing on diversity? The seven-strong board has one female non-executive director and no-one from an ethnic minority background. The company supports the Hampton-Alexander and Parker reviews and is committed to increasing female and ethnic representation on its board.

Moonpig

When: 10am, Wednesday 18 September.

Where: Allen Overy Shearman Sterling LLP, One Bishops Square, London E1 6AD.

How to participate: Proxy voting instructions should be returned no later than 10am, Monday 16 September. More details about the Moonpig Group Ordinary Shares (LSE:MOON) AGM can be found here.

Who’s in the chair? Former WH Smith boss Kate Swann was appointed in 2019 and oversaw the company’s stock market flotation in 2021.

How did the company do in the year to 30 April? Revenues at the online greetings card and gifting firm rose 6.6% to £341.1 million, with underlying earnings up 13.5% to £95.5 million. Earnings per share rose 28.2% to 10p, while strong cash generation meant the leverage ratio reduced to 1.31 times from 1.99 times a year earlier. There was no dividend award for the year.

How have shares performed? Up 14% to 155.8p (216p last Thursday).

How much is the boss paid? Nickyl Raithatha’s base salary increased in May by 4% to £621,296. His total remuneration for 2023/24 amounted to £1.26 million, which included £565,342 of cash and deferred shares after the annual bonus scheme paid 63.1% of the maximum opportunity, mainly due to the company’s performance on adjusted earnings. The long-term incentive awards granted at the IPO contributed £68,273 as they vested at 12.5% after the total shareholder return metric was not met. In 2023, Raithatha’s single remuneration figure was £6.7 million due to the vesting of incentives awarded prior to the IPO in 2021.

Why did executives receive top-up share awards? Following the AGM approval of 2023’s remuneration policy, long-term incentives were granted last September in addition to the core award of 250% of salary. These were worth an additional 200% of salary and subject to performance conditions more stretching in terms of earnings per share and relative total shareholder return. Moonpig’s remuneration committee has said the awards are an important means to ensure the continued retention and incentivisation of the executive directors “who continue to deliver superior performance albeit in the context of a more difficult external environment which has led to challenges and a de-rating of most technology companies”.

How did last year’s AGM go? The new three-year remuneration policy was approved but with 17.85% of votes cast against. The annual remuneration report got 96.39% support.

How’s the company doing on diversity? The seven-strong board has 43% female representation, including in one senior role. Two members are from an ethnic minority background.