Pay roasting at Kingfisher

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The Independent Online
KINGFISHER is under intense pressure to cut the £1.3m pay packet and three-year rolling contract of its chief executive, Sir Geoff Mulcahy, in the wake of last week's boardroom upheaval.

Sir Nigel Mobbs, deputy chairman, conceded that some institutional shareholders were pressing for a more modest package and one more closely linked to Kingfisher's performance. "It's a matter we'll have to look at,'' he said.

He also revealed that the bloodletting - foreshadowed in the Independent on Sunday last week - may not be over. "There are other possible changes," he said.

The company's in-house management consulting arm, under strategy directorTim Breene, is likely to come under scrutiny. The position of Brent Wilkinson, managing director of the poorly performing Comet chain, is also under review.

Sir Nigel plans to take the axe to Kingfisher's head office costs, which have mushroomed to £20m in recent years. The head office, once admired for its skeleton staff, now employs more than 100 people.

On Friday, Kingfisher ousted the chief executive, Alan Smith, and demoted Sir Geoff from executive chairman to chief executive, following a profits warning the previous week. James Kerr-Muir, the finance director, is to leave in March. And Jonathan Weeks, Woolworth managing director, has taken early retirement. Their pay-offs are expected to cost £2m to £3m.

In the year to 29 January 1994, Sir Geoff was paid £622,000 in basic salary, a bonus of £323,000, a second "long-term'' bonus of £105,000 and a pension contribution of £264,000.

The boardroom changes brought a mixed reaction in the City.

Roy Maconochie, an analyst with Henderson Crosthwaite, said they were very positive for Kingfisher: "The combination of Geoff Mulcahy and Jim Hodkinson (head of B & Q) will drive the recovery through the company."

But Tony Shiret, at BZW, said most institutions he had spoken to believed that Sir Geoff should have gone, not Mr Smith. "Mulcahy forced the non-executives into a choice before the institutions had been consulted.''

Last week, we mistakenly captioned a photograph of Alan Smith, former managing director of B & Q, as Alan Smith, then chief executive of Kingfisher. We apologise to both Mr Smiths.

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