Restaurant chief Hornby in pay row
. . . just as thousands of staff are axed
EX- BANKER Andy Hornby is embroiled in a new pay row at The Restaurant Group over plans to hand him a huge shares windfall after thousands of staff lost their jobs.
Hornby, the former HBOS chief executive who now runs Wagamama and Frankie & Benny’s, waived his bonus for 2019 and took a pay cut as the group battled to survive the pandemic.
But on Thursday The Restaurant Group will ask shareholders to approve a new executive pay scheme that would give him a fixed annual payout on top of his £630,000 base salary.
If the plan is approved, Hornby will be handed a potential £787,500 share award for this year – taking the chief executive’s total maximum pay packet for 2020 to £1.3 million.
From 2021, his £ 945,000 cash bonus would be reintroduced alongside a £630,000 share award, taking his maximum potential remuneration to £2.2 million.
The vote on the pay deal comes amid a crisis for the hospitality i ndustry, with f orecasts t hat up to a million more jobs could be lost this winter.
The Restaurant Group has made 4,500 staff redundant during the pandemic and has closed about 250 of its 650 pubs and restaurants.
Shadow Business Minister Lucy Powell said: ‘Business owners are being put in an impossible position during this crisis by the failure of government to adequately support sectors like hospitality in deep distress, but this will be a kick in the teeth to the thousands of workers in The Restaurant Group who have been laid off.
‘Ministers must redouble their efforts to get excessive pay under control and make sure workers don’t pay the highest price.’
Andrew Speke, of the High Pay Centre pressure group, said: ‘Companies have a moral responsibility to protect workers’ jobs over their top bosses’ bonuses.
‘To make thousands of workers redundant and still award the chief executive a bonus large enough to have saved dozens of jobs is completely unacceptable.’
Glass Lewis, an influential shareholder advisory group, said it has ‘severe reservations’ regarding the 2020 pay deal ‘given the continued shareholder and wide workforce experience and in light of the company’s share price’.
It said: ‘The company announced that it anticipates that there will be a slow recovery in footfall during the rest of the financial year ... which will have a material impact on the company.’
The Restaurant Group s ai d Hornby’s £787,500 share award for 2020 will become available to him in three years’ time, and that half that sum is subject to hitting performance targets.
A spokesman said: ‘Management have taken voluntary executive pay cuts of up to 40 per cent and waived bonuses that were approved pre- Covid. This is a long- term scheme and no payout can be made within the next three years. In the short-term the senior team continue to take voluntary pay cuts.’
Hornby’s appointment as chief executive of The Restaurant Group is his first job leading a public company since he ran HBOS, which he left after its taxpayer-backed bailout during the financial crisis.
He then ran chemist Alliance Boots, l eaving i n 2011 with a £ 2.4 million payoff, followed by gambling giant GVC Holdings, where his salary was undisclosed because he did not take a seat on the board. Hornby joined The Restaurant Group in August last year.
On Tuesday, t he group will announce half-year results for the six months to June.