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On the Beach acts over director pay rise concerns

On the Beach has pledged to consider shareholder feedback on future pay for executive directors after concerns were raised over a salary hike for its financial chief.

In an update on the voting outcome at its annual meeting in February, the online travel retailer said a minority vote against the directors’ remuneration report for 2017-18 was mainly due to the salary increase awarded to chief financial officer Paul Meehan for the new financial year.

The resolution was passed at the AGM with 78.56% votes in favour, with a “significant minority” against.

The CFO’s base salary was increased from £253,000 a year to £310,000 from October 1, 2018 “to reflect his strong performance since appointment and increased responsibilities around M&A [merger and acquisition] activity and shareholder engagement,” according to the company’s annual report for last year.

No increase was given to CEO Simon Cooper, despite his base salary of £204,000 being described as below the market level, given his “considerable shareholding” in the firm.

No bonuses were paid for the last financial year despite the strong performance of the group, which saw the pre-tax operating profit increase 17.9% to £33.6 million over 2017.

On the Beach said in a note to the London Stock Exchange: “There was an active engagement process with shareholders to discuss all of the changes being made to the remuneration arrangements, including this salary increase, ahead of the publication of the annual report and the company’s major shareholders were supportive of the proposed changes.

“The board believes that the salary increase awarded resulted in an appropriate market positioning as Paul Meehan has become more established in his role and taken on a wider range of responsibilities since his appointment in 2017.”

There has been no action taken or further engagement with shareholders or concerns raised by them following the annual meeting in relation to this specific issue or remuneration more generally, it added.

However, the company said its remuneration committee “has noted the concerns raised by some of its shareholders and the proxy organisations as part of the engagement process prior to the AGM.

“The remuneration committee will reflect on this feedback as it considers the remuneration of the executive directors for future years, whilst maintaining focus on alignment with the best interests of shareholders and also with the company’s overarching reward principles.”

 

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