The reward for failure: Morrisons’ Dalton Philips earns £1m bonus
DALTON PHILIPS, the former chief executive of Morrisons who was removed for presiding over a £792m loss and a halving of the share price, received a £1.01m bonus for his work.
This was on top of a basic salary of £850,000, pension benefits of £213,000 and additional benefits worth £28,000. Half of Mr Philips’ annual bonus is deferred in shares for three years.
His remuneration for the year’s performance which resulted in him leaving the company totalled £2.1m. He left Morrisons six weeks after his departure was announced, and he has received a further payment “in respect of salary, benefits and pension for the unworked portion of his 12 month notice period, paid in instalments and subject to mitigation”.
He could also receive a further 820,000 shares over the next two years through the long-term incentive plan, which would be worth £1.6m on current values.
Morrisons justified Mr Philips’ bonus – which was 60% of the maximum he could have received – because “the business has delivered on a substantial portion of these objectives for the year”.
Fellow executive director Trevor Strain, who is still with the company, was paid a bonus of £602,000 on top of his finance director’s salary of £490,000.
It said: “The underlying PBT [profit before tax] performance was in line with
the target level set and the strategy communicated to the market at the beginning of the year. Against the strategic scorecard, the business achieved against its operating cash flow, online service and cost savings targets.”
It added: “Taking into account his contribution to the business through a period of significant industry change, as well as the importance of ensuring a smooth transition, the committee determined that Dalton was a good leaver for the purposes of his incentive awards.”
Mr Philips’ replacement, David Potts however could be awarded a bonus of up to £2.55m in shares – three times his annual salary of £850,000 – which is conditional and based on the performance of the firm under Morrisons’ long term investment plan.
