Selfridges backs down on pay

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The Independent Online

Selfridges, the department store group, revised its executive share option scheme yesterday after pressure from shareholders.

Selfridges, the department store group, revised its executive share option scheme yesterday after pressure from shareholders. Institutions had expressed concern about what they saw as "undemanding" targets.

Selfridges watered down the plan ahead of its annual meeting yesterday, Almost 24 per cent of shareholders voted against the scheme ,though the company pointed out that these votes had been cast on the original plan before it had been revised.

Instead of awarding directors and senior executives share options worth up to 300 per cent of basic salary, the figure will be capped at 200 per cent. Options to the value of 300 per cent can still be awarded, but only in "exceptional circumstances".

However, The Local Authority Pension Fund Forum questioned the performance targets proposed for the new scheme and called it "flawed".

LAPFF spokesman Stuart Bell, who attended the meeting, commented: "The company's willingness to be flexible on some aspects is very welcome. However, it did not address the central issue of the inadequate performance targets. Shareholder concern about these was reflected in the high level of opposition to the scheme. We continue to view the performance target of real EPS growth of 3 per cent per annum as weak compared to both market expectations and to the targets adopted by many other retailers. This sort of target fails to set challenging goals for executives."

The climbdown is the second time in as many weeks that a major UK company has been forced to back down over boardroom pay. Last week Prudential abandoned a controversial bonus scheme after opposition from shareholders.

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