Michael Sharp, the chief executive of Debenhams, has enjoyed a 32% rise in his 2014 pay despite the continuing struggles at the department store.
A three-year incentive plan boosted the retailing veteran’s total package to £998,734 in the 12 months to August this year, from £754,396, even though the group’s shares trailed those of similar sized companies during the life span of the scheme. Debenhams’ profits also dipped by more than 20% during its last financial year.
Sharp failed to hit many of his targets and was paid no cash bonus in 2014. He received only 22% of the maximum payout under the three-year incentive deal after Debenhams shares rose by around 20% over the period, compared with a 60% rise in the FTSE 250. The company said Sharp hit a target based on an accounting measure, return on capital employed.
Last week the retailer announced that another incentive scheme was being established, under which Sharp could be awarded a maximum of 1.4m shares in the company, worth around £930,000 at current prices. That announcement came after Sharp insisted last month that the department store group was in “good shape for Christmas” despite the dive in profits.
“We’ve started to recover from what clearly was a very disappointing result [last winter] and what that does is give us confidence for the future,” said Sharp, who has been Debenhams chief executive since September 2011, deputy chief executive from 2008 and chief operating officer from 2006.
Separately, Debenhams has also attracted the attentions of Mike Ashley’s Sports Direct group, which last week increased its interest in the department store from 11.2% to 12.7% using financial instruments rather than shares. Sports Direct has four concession areas within Debenhams stores and is also thought to want to introduce its fashion brands, such as Firetrap and Kangol.
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