Drop bonuses, bosses urged, as companies axe dividends

BOSSES were last night urged to ditch their bonuses as a dozen London-listed companies suspended or axed their dividends.

In another blow to investors reeling from the stock market rout of recent weeks, clothing retailer Joules, pub chain Shepherd Neame and housebuilder Crest Nicholson were among the companies reneging on their promises to hand millions of pounds to savers, fearing the coronavirus outbreak could leave them short of money.

Insurer Direct Line revealed it would be suspending its £150m share buyback after scooping up just £29m worth of shares, and coach operator National Express admitted it too was reviewing its dividend.

Now City figures are calling on companies to consider docking bonuses in an effort to preserve more cash and save jobs.

Former City minister Lord Myners said: ‘It’s a duty for the board of directors to act to protect and preserve the business. If retaining more cash enhances resilience, then that is what they should do.’

He added that pension funds and savers may have been relying on dividends for income, so companies should look to restore the payouts as soon as stability is restored.

In total, firms have suspended or cancelled more than £600m of handouts to investors so far this year, according to AJ Bell.

Bookie William Hill, which has been battered by sports cancellations, axed its £46m dividend. Software giant Micro Focus also pulled its £149m payout, as did Shoe Zone.

Luke Hildyard, director at the High Pay Centre, said: ‘It’s right that these companies are suspending dividends in favour of protecting workers’ jobs, but they should also look at capping bonuses and executive pay.’

Other companies that ditched their dividends yesterday included Paypoint, Playtech, New River, PPHE, RM, Portmeirion, Quartix, Space and People and Elementis.