William Morrison Supermarkets PLC - Proxy report 14/06/2018
Item 2: Approve the Remuneration Report
The structure is considered unsatisfactory as the maximum bonus exceeds guidelines (200% of base salary) and quantum is excessive. More importantly, the Company has made its Adjusted FCF targets significantly less challenging in what appears to be an attempt to keep vesting rates for its LTIP high in coming years despite decreases in operating cash flows. It has also adopted EPS growth targets that are well below historical growth rates over the past three years. Making matters worse is the fact that 48.11% of shareholders voted against the Remuneration Report at the 2017 AGM largely due to the “perceived stretch in 2017-20 LTIP targets”.
Item 14: Re-appoint the Auditors
Average non-audit fees incurred over the last three years were 55.6% of audit fees, which is above our limit of 50%. The level of non-audit fees may undermine auditor independence.
Morrisons (Wm) Supermarkets is engaged in the grocery retailing in the U.K. Through its subsidiaries, Co.'s principal activities include include the acquisition of food products, property management, maintenance and investment, manufacturing and distributing of food products, insurance captive, preparation and supply of seafood, meat processing, manufacturing of morning goods and bread, produce packer and purchaser, grocery retailer and pharmaecutical license holder. As of Jan 29 2017, Co. operated a total of 491 stores, 334 petrol filling stations, 401 cafes and 118 pharmacies.
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