Ted Baker is facing backlash from its shareholders over recent plans to increase salaries and bonuses for its retail executives. The revolt began when the Institutional Shareholder Services (ISS) advised investors to vote against the proposed remuneration policy, amid the firm’s current battle for survival.
An unjustified salary increase
The ISS advisory firm believe the proposed increase in salaries for executives cannot be justified given the current sales environment. The board is planning on increasing potential bonuses to 200 per cent of salaries. However, the shares have decreased in value by roughly 95 per cent over the past two years, following issues such as the overstatement of stock levels at the beginning of 2020.
The potential salary increase also comes at a time when Ted Baker is reportedly planning to make 500 job cuts within its retail stores and its headquarters. This could amount to 25% of its total UK workforce, in an effort to reduce staffing costs by £6 million before the end of 2020.
The executives have also seen their roles adjusted in recent months since the former chief executive, Ray Kelvin, left in December last year. Lindsay Page, the former chief operating officer, took over Kelvin’s role, however, after just three months she was replaced by Rachel Osborne. The situation for the company has also been impacted by other senior departures, such as former retail director Chris Browne and the former boss of womenswear, Catherine Scorey.
A strengthening retail sector
This prominent fashion retailer was struggling before the Covid-19 pandemic struck, with the latest revolt at the company’s annual general meeting emphasising the difficulties the company is facing.
However, despite the current economic difficulties, there are some fashion brands which are riding high, such as Boohoo and PrettyLittleThing. The latest BRC-KPMG Retail Sales Monitor figures have revealed that the UK retail industry has strengthened since stores reopened. In June retailers across the UK experienced their biggest monthly increase in sales for more than two years, with a 3.4 per cent increase.
However, the pandemic is still posing challenges for the retail industry, with companies looking for ways to steer their business out of the woods. Many of the most well-known brands are seeking experienced retail executives who have the skills and experience to drive both online and offline sales.
If you are looking for a new challenge and have the experience needed to ensure a business bounces back successfully, please contact our team today to find out about our latest opportunities.