The DIY retailer Steve Johnson stands to collect a £7m windfall if he succeeds in what is reckoned to be the toughest job in British retailing – turning round the ailing high-street chain Woolworths.
The stock market delivered its verdict on the surprise appointment by marking the shares down nearly 3 per cent to 7.15p. They have fallen nearly 70 per cent in the last year.
Mr Johnson, 44, who was chief executive of the Focus DIY stores until July last year, starts in September. He replaces Trevor Bish-Jones, who resigned in June.
Last month, Woolworths reported sales down by 6.7 per cent in its 800 stores in the six weeks to 26 July, and it will struggle to break even at group level this year.
Its chairman, Richard North, said Mr Johnson would bring the "strategic and operational skills that the group needs to help it move to the next stage of its development".
But Freddie George, an analyst at Seymour Pierce, thought Mr Johnson did not have a reputation for merchandising or coming up with new ideas for a format. Before Focus, he worked for GUS and the supermarket chain Asda.
Mr Johnson will be paid £550,000 a year and, unusually, is on a two-year contract, dropping to 12 months after the first year. Cynics will suggest he wants to be sure of a decent pay-off if he fails in the job or Woolworths is taken over.
On top of bonuses, he is being awarded options over 24 million shares, which could be worth £4.8m if he gets the share price up to 20p – or nearly three times its current level – over the next four years. The broker Altium is expecting the price to fall to 4p.
Mr Johnson was on holiday and not available to comment yesterday but a spokeswoman said he looked forward to a new challenge.