A new shareholder resolution at restaurant chain The Restaurant Group has passed but was met with resistance.
The restricted share plan was ultimately approved by investors though over a third of shareholders voted against the proposal.
Some 37% of those who voted were against the new pay package which qualifies Andy Hornby, chief executive for a £787,500 share award.
Hornby has waived his annual bonus and taken a 40% pay cut in response to the pandemic, however, the share award increases his earning potential in 2020 to as much as £1.2 million.
The vote comes amidst The Restaurant Group’s plans to close 230 sites while laying off roughly 4,200 staff.
According to the Financial Times, Glass Lewis, the shareholder advisory company, had “severe reservations” regarding the pay scheme due to “the continued shareholder and wide workforce experience” throughout the global pandemic.
Hornby’s potential income is set to increase to a total of £2.2 million next year as he is in line to receive a further £945,000 cash bonus and £636,000 in shares.
Debbie Hewitt MBE, chairman of The Restaurant Group, defended the decision in a statement following the vote, saying: “We are pleased that the majority of our shareholders have approved the new policy and restricted share plan, which we believe are in the long-term interests of the company and its shareholders.
“We recognise that some shareholders did not support the proposal. We have signalled our intention that the 2021 grant (due to be made in March 2021) will be at the lower level of 100% of salary using the five-day average closing share price over the period immediately prior to grant, with this lower level intended for subsequent grants.”
She added: “The circumstances surrounding this year’s award are exceptional. Our management team has proactively taken voluntary executive pay cuts of up to 40% and waived the payment of bonuses that were approved pre-Covid. This is a long-term scheme and the 2020 award will only vest in full in three years’ time if the underpins are achieved.
“In the short-term the senior team continue to take pay cuts while the company is still making use of the Government’s job retention furlough scheme.”