WH Smith retreats over CEO pay after investor revolt

WH Smith has delayed a pay increase for Chief Executive Carl Cowling after almost one-third of shareholder votes opposed the company's remuneration report.

The FTSE 250 company said 32.6% of votes at the meeting opposed the pay report at the annual general meeting held behind closed doors. It said shareholders' main objection was to a £25,000 a year increase to Chief Executive Carl Cowling's pay planned for each of the next three years.

WH Smith said its pay committee thought Cowling deserved the first increase from 1 July 2020 and that its arrangements were in line with the company's approved pay policy.

The company said after consulting big investors it would postpone the next £25,000 pay rise scheduled for April and that it was unlikely to give Cowling the money before the end of the financial year in August.

WH Smith said: "We acknowledge that a significant minority of shareholders … chose not to support this resolution. We will continue to actively engage with shareholders on executive remuneration to ensure their views are fully understood during 2021."

Investors are taking a hard line with companies over executive pay with profits down, dividends cut and jobs under threat in the Covid-19 crisis. WH Smith's results have been hit by its acquisition of US airport shopping group Marshall soon before the pandemic struck. The company has cut 1,500 jobs during the crisis.

The revolt was much bigger than the 12.2% vote against WH Smith's remuneration report in 2020 when investors objected to Cowling's 12.5% pension contribution. The company has agreed to reduce his pension contribution to the same level as the wider workforce - currently 3.5% - from the start of 2023.