Ousted Kingfisher directors to receive total payoff of £2.7m

BY NIGEL COPE

The four Kingfisher directors ousted after the Woolworths-to-Comet retailer announced a profits warning in January are to receive payoffs totalling £2.7m

The sums are certain to anger the group's shareholders who have seen the Comet electricals subsidiary fall into loss and profits at Woolworths slump by a third.

Kingfisher was the worst-performing share on the FT-SE 100 last year.

Nigel Whittaker, the former corporate affairs director who helped to found the Kingfisher group in 1982, received the highest pay-off of almost £1m. Mr Whittaker, who received a salary of £413,000 last year, received a £595,000 pay-off plus a further £350,000 in pension contributions.

Alan Smith, the chief executive who only joined the group two years ago from Marks & Spencer, was paid compensation of £875,000 including £180,000 in pension contributions.

The group's finance director, James Kerr Muir, will receive £550,000. Tim Breene, the strategy director who joined the board last year, will be paid £375,000.

Kingfisher denied that the pay-offs were rewards for failure. A spokeswoman said: "The company chose to restructure and therefore there had to be casualties."

A City analyst said: "It's a lot of money but it's down to the system of contracts." All four of the departed directors were on three-year rolling contracts and could have been entitled to much more if their contracts had been paid up in full.

According to the company's annual report, Sir Geoff Mulcahy, who was demoted from chairman to chief executive as a result of the restructure, saw his pay fall from £1.3m in 1993 to £949,000 last year.

Kingfisher announced one addition to its board yesterday with the appointment of Tony Percival as finance director. Mr Percival, who is 55, is a former partner of Coopers & Lybrand and has been acting in the role since February.

The company also issued a six-point plan to rebuild the group's fortunes. This included promises to deliver improved profits at Woolworths by the end of the financial year and to return Comet to profit by the same deadline.

The annual report shows that although the UK electricals market grew by 3 per cent last year to £5.53m, Comet's share slipped from 10.1 per cent to 9.6 per cent. The share held by the regional electricity companies also fell, from 34.6 per cent to 31.6 per cent. Kingfisher says it will refurbish stores and upgrade systems.

At Woolworths, the product range is to be adapted according to the size of the store. Last year Woolworths' share of its markets declined from 6 per cent to 5.8 per cent, although its shares of the entertainment and childrenswear markets both increased.

According to Kingfisher's figures, Woolworths has 14.3 per cent of the entertainment market - CDs, videos, etc - making it the market leader. In toys, Woolworths ranks third with a 9 per cent share, behind Toys R Us and Argos.