Scrap Adderley re-election, recommends PIRC
Shareholders at Syston-based retailer Dunelm are being urged to oppose executive deputy chairman Will Adderley's re-election.
Investment watchdog Pensions & Investment Research Consultants (PIRC) said the fact that Adderley is a controlling shareholder and sits on the nomination committee "contravenes best practice".
Adderley was chief executive at the company from 2006 until February 2011 and is a controlling shareholder with 34.7 per cent of the company's issued share capital.
Shareholders are set to vote on his re-election at the company's AGM on 17 November.
PIRC's report into the vote stated: "PIRC does not think that the chairman, deputy or otherwise, should maintain executive responsibilities. Further, there is insufficient independent representation on the board. We recommend shareholders oppose his re-election."
It added that Dunelm could also "provide further disclosure" to demonstrate its process for assessing overall levels of director pay.
"The company does not disclose the peer group used for determining either salaries and annual bonuses," said PIRC.
"The corollary of this is that peer group performance is not presented in the body of the report. Personal performance measures and targets are not fully disclosed and the application of both financial and non-financial KPIs is poorly illuminated, if at all."
PIRC's report claims that chief executive Nick Wharton received sign-on bonuses equal to 288 per cent of salary. These include £150,000 cash and a non-performance based option award of ordinary shares equal to some £1,000,000.
PIC said: "This is considered inappropriate. There is the potential to allow unvested LTIP awards to be exercised upon change of control. Whilst mitigation is applied, the Company dismiss the suitability of clawback provisions."
Dunelm did not reply to Insider's request for comment.
In its latest trading statement released on 5 October, Dunelm said sales increased 5.3 per cent over the last quarter.
Revenues hit £133.4m for the 13 weeks to 1 October.
One new superstore was opened during the first quarter at Dartford, bringing the company's portfolio to 104 in the UK.
Ten new stores are scheduled to open in the second quarter, said Dunelm, with four more locations committed and expected to commence trading in the second half of the financial year.
At the time, Wharton said: "Despite the challenges provided by the UK consumer environment, our simply value for money proposition continues to resonate with customers in both established and new stores.
"Given the current environment we continue to take a disciplined approach to operating costs. Nevertheless, we remain confident about the growth opportunities provided both from store expansion and via the web."
