Update on Executive Remuneration - April 2020
DIRECTORS’ REMUNERATION – COVID-19 IMPACTS AND NEW CFO APPOINTMENT
PRE-AGM UPDATE BY REMUNERATION COMMITTEE CHAIR
At our Annual General Meeting on 15 May 2020 (the ‘AGM’), William Hill shareholders will be asked to approve two ordinary resolutions on remuneration matters as part of the normal business of the meeting:
The Directors’ remuneration report for 2019 (including the Directors’ remuneration policy) is set out in our 2019 Annual Report and Accounts.
We engaged with a number of shareholders and representative bodies in December 2019 and early 2020 regarding the proposed renewal of William Hill’s Directors’ remuneration policy at the AGM and the vast majority of our major shareholders who responded were supportive towards our new policy, which reflected a number of developments in good governance.
This update provides information on further developments on remuneration at William Hill ahead of the AGM, principally our response to the Covid-19 impacts and our appointment of Matt Ashley as our new CFO (as announced on 2 April 2020).
Covid-19 impacts
As a board, we are focused on taking appropriate steps during the current emergency that will look to protect the interests of all of our key stakeholders (employees, customers, suppliers and shareholders) to best ensure the strength of our business in the long-term. On 16 March 2020, we announced the suspension of our 2019 dividend.
From an employee perspective the most marked impact has perhaps been on those employees working in our retail business where we have had to close our stores. We understand that the income that these roles provide to many employees and their families is important and so we have decided to top-up the wages of furloughed colleagues to 100% of normal salary levels for the time being.
In the context of executive remuneration, we have taken three key decisions:
Fifty percent (50%) of Ulrik Bengsston’s 2019 bonus was paid to him in the form of a deferred share award that will vest two years after the award date. That award was calculated using a share price of 150p (the three-day average share price following the publication of the 2019 results) rather than using the prevailing share price at that time of the award (128p). As at the close of business on 6 April 2020 the share price stood at 79.9p.
Matt Ashley’s appointment as CFO: remuneration terms
A summary of Matt’s remuneration terms was included in the RNS of 2 April 2020 regarding his appointment. As a Board we were pleased to secure Matt’s appointment promptly following Adrian Marsh’s decision to not take up the post of William Hill CFO. Matt is an experienced UK plc CFO, and also has direct experience of managing significant US operations. We believe Matt’s appointment is important in providing stability for our business in the face of the current challenges and will serve our shareholders well. We have received comments from a number of our leading shareholders welcoming Matt’s appointment, along with the timely manner in which it was made.
Also, we are confident that we have protected our shareholders’ interests appropriately by not overpaying for this appointment (Matt has accepted no new incentive pay in 2020 as disclosed above) and ensuring that any buy-outs of incentive pay arrangements from Matt’s previous role are appropriately “like for like” in terms of delivery in shares, being subject to on-going performance requirements and holding obligations, and being time pro-rated (to give Matt only the shares he would have received as a “good leaver” from National Express).
Matt’s first such buy-out award is due to vest in April 2020. Matt has agreed to invest the proceeds in William Hill shares which he will hold and which count towards our share ownership guidelines.
Conclusions
For information, we have set out in the Appendix the summary of the main changes in our proposed 2020 remuneration policy (including Executive Director pensions being aligned to employee levels, and post-cessation share ownership guidelines) plus an updated summary of how remuneration will be applied for our Executive Directors in 2020.
I would like to thank all shareholders and their representative bodies for their constructive inputs on remuneration at William Hill during the past year, and I look forward to receiving shareholders’ support at the forthcoming AGM.
Yours sincerely,
Lynne Weedall
Remuneration Committee Chair, William Hill PLC
8 April 2020
Appendix
Summary of Proposed Changes to the Remuneration Policy
Summary of Remuneration Policy Implementation for 2020
|
CEO |
CFO (from appointment) |
Salary |
£600k (0% increase from 1 January 2020) |
£450k (pro-rated in 2020) |
Pension |
5% of salary |
5% of salary |
Annual1Bonus |
150% of salary normal max |
125% of salary normal max |
In 2020 the annual bonus plan has been suspended |
||
LTIP1 |
200% of salary normal max |
175% of salary normal max |
No 2020 LTIPs awarded |
||
Other |
|
Share awards forfeited as a result of Matt's resignation from National Express will be compensated on a like for like basis. The first of these awards will vest during April 2020, and Matt has agreed to invest the proceeds in William Hill shares. The replacements for other "in-flight" National Express LTIPs will treat Matt as if he had "good leaver" status from National Express, with the quantum reduced pro-rata and vesting remaining subject to the original National Express performance metrics. Value from these later awards will be delivered in William Hill shares, subject to appropriate holding requirements. |
1 These max levels were committed to for 3 years from 2019 in the 2018 DRR