Online retailer THG faces major revolt by investors over salary for new finance chief
FORMER British tech champion THG is facing a shareholder revolt at its investor meeting that risks deepening chief Matthew Moulding’s dislike of the London market.
THG, the online retailer behind brands including Lookfantastic and Glossybox, risks being dealt a bloody nose at its annual general meeting (AGM) later this month after influential shareholder advisory firm Glass Lewis recommended that investors reject two proposals being voted on.
Investors are being urged to reject THG’s pay report because of an increase in its new chief financial officer’s salary.
Damian Sanders will earn £500,000 a year, which is 11pc more than his predecessor, John Gallemore.
Glass Lewis said no “compelling justification” had been given for the increase, which comes despite ballooning losses and a declining share price.
The investment advisory group has also urged investors to vote against the re-election of Iain McDonald, a proposal it put forward last year.
Glass Lewis claimed this was because he was an “affiliate or insider” on the pay committee. Mr McDonald is a nonexecutive director at both THG and Boohoo, as well as a founder of Belerion Capital, which last year tabled a takeover approach for THG.
The call to a vote against THG’s management risks deepening Mr Moulding’s dislike of the London investment environment.
Mr Moulding, who also founded the company, has been highly critical of the London stock market since THG’s debut in September 2020. He has called the listing a “mistake” that “just sucked from start to finish”. The company’s valuation has sunk from about £6.5bn in September 2020 to £813m currently. The slide has coincided with a wider downturn for tech stocks in 2022 and came as losses mounted at THG.
Analysts have also raised concerns about governance at the company, which Mr Moulding has sought to address through a series of concessions including giving up a “golden share” in the business. Mr Moulding has claimed bankers, analysts and hedge funds are conspiring against his company and said the experience of being a public company in London is “unpleasant”.
He has signalled that he would be willing to take the company private and last month argued THG would be worth “billions more away from the daily market manipulation”.
The annual general meeting comes weeks after THG turned down a takeover bid from private equity firm Apollo.
THG said of the Glass Lewis recommendations: “Charles Allen joined the board as independent non-executive chair in March 2022 with a clear mandate to improve governance, transparency and to strengthen and refresh the board by improving its independence and diversity.
“Since then, the board has appointed three new independent NEDs in Gillian Kent, Dean Moore and Sue Farr, as senior independent non-executive, and with a commitment for further appointments in line with good corporate governance.” Mr Sanders took over as chief financial officer from Mr Gallemore earlier this year.