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Wolseley exec pay backed despite slump

Shareholders holding close to 10 per cent of Wolseley shares voted against a resolution to approve the executive management team’s pay package at the group’s Annual General Meeting.

The amount of money being paid to Wolseley’s executive directors has come under closer scrutiny due to the group’s increasingly difficult circumstances and a sharp fall in profits.

On Monday the group reported in an interim statement that it was axing around 2,000 jobs in the UK with hundreds more to go in its European operations - this is on top of more than 10,000 job cuts since 2006.

On the same day the AGM saw shareholders asked to vote on 11 resolutions. A total of 13.45 per cent of votes cast by proxy were against the second resolution which covered executive pay –  a total of 61.48million votes which represent 9.2 per cent of total shareholdings. Last year, only 1.8 per cent of votes went against the equivalent resolution.

The full details of pay and bonuses were included in the remuneration report included in the annual report for the year ending 31 July 2008 sent out ahead of the AGM which also detailed group operating profit had fallen from £753mill to £301mill.

The remuneration report stated: “The policy is designed to incentivise the Executive Directors to meet the company’s financial and strategic objectives.”

Salary, bonuses and benefits meant chief executive Chip Hornsby took home a £1.2million package in 2008  - an increase of 13.6 per cent compared to the previous year.

Meanwhile, Rob Marchbank, chief executive Europe, has received a £900,000 package – up 4.6 per cent. Steve Webster, chief finance officer, saw his package fall by £33,000 to £906,000.

The report said basic salaries were determined by benchmarking against businesses of comparable size, geographic spread and business sector.

It noted that “in recognition of the financial circumstances currently being faced by the company” basic executive salaries were to rise by three per cent for the financial year starting on August 1, 2008.

Related stories:
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Wolseley hit by profit slump
UK bosses axed as Wolseley retrenches