Wm Morrison Supermarkets Plc Chief Executive Officer Dalton Philips has waived his bonus amid falling profits caused by a price cuts to fend off budget competitors.
Philips asked not to be considered for his 374,000-pound ($621,101) annual bonus, a spokesman at the Bradford, England-based retailer said today. The CEO’s base salary of 850,000 pounds is unaffected, he said. Sky News first reported that Philips had declined his bonus.
Morrison shares plunged the most in 11 years on March 13 after the retailer announced that 2014 underlying pretax profit will fall to about half of the 785 million pounds reported last year. Philips pledged to invest 1 billion pounds in lowering prices and to reposition the company as a low-price fresh-food retailer to regain market share from discounters Aldi and Lidl. Aldi’s sales rose a record 34 percent in the most recent 12-week period, Kantar Worldpanel said March 11.
About 60 percent of Philips’s bonus is dictated by the retailer’s profitability, with the remainder split equally between strategic progress, such as starting the grocer’s online business, and personal goals.
Under the arrangement, Philips would have been entitled to 22 percent of the maximum bonus, which is 200 percent of his base salary.
Finance Director Trevor Strain, who did not waive his bonus, was awarded 50,180 shares deferred for three years, the company said in a statement today. He also used the cash element of his bonus to purchase 23,503 shares in the company.
Morrison shares were up 0.5 percent at 212.30 pence at the close in London, paring this year’s decline to 19 percent.