17 September 2012 10:20
SuperGroup, which owns the Superdry clothing label, is expected to come under fire over its directors' pay packages at the company's annual general meeting later this week.
Concerns have been raised by shareholder groups ahead of SuperGroup's shareholder meeting on Thursday, with the pay deal for new chief operating officer Susanne Given in particular coming under scrutiny.
It is believed the Association of British Insurers (ABI) has put an "amber alert" on SuperGroup's remuneration report, its second most severe warning, while shareholder body Pirc has recommended investors vote against the pay proposals.
Ms Given – who was hired in April from John Lewis, where she was director of fashion and beauty – has been offered a package including a £350,000 base salary, as well as a guaranteed share award of 300% of salary, or £1.1 million, as a "golden hello".
Shaun Wills, who was appointed chief financial officer in April, is paid £250,00 in annual salary and will also receive a golden hello worth £500,000 in shares.
Pirc said: "This practice is not in the company or investors' long-term interests as it contributes to a general tendency to grant such replacement awards, which in turn devalues the retentive effect of share schemes."
It added that some of the financial targets set for the long-term incentive schemes "are not considered sufficiently challenging".
SuperGroup said in its annual report that it is aware the awards are "unusual" but that they were "necessary to facilitate both recruitments".
But investors do have something to cheer when they meet this week after recent figures confirmed a sales revival at the firm.
SuperGroup, which has 81 UK retail stores, said total sales in the 13 weeks to July 29th were up 20% at £40.2 million while like-for-like sales rose by 1.7%.
The company, which was founded in Cheltenham in 1985 by chief executive Julian Dunkerton, said its sales of jackets, gilets and sweatshirts proved that the Superdry range offered a degree of protection against the weather.
This is a marked recovery after profits fell by 15% in its last financial year and it was forced to slow expansion plans.