THG shareholders are preparing to revolt over a salary increase for the British retailer and brand owner’s new CFO Damien Sanders.
The anticipated rebellion comes after shareholder advisory firm Glass Lewis said there was no “compelling justification” for the pay rise, as the company grapples with mounting losses.
If approved, Sanders' salary would jump to £500,000, 11% more than his predecessor John Gallemore.
Glass Lewis has now urged shareholders to reject THG’s pay report at its upcoming Annual General Meeting at the end of June, The Telegraph reported.
The firm has also recommended investors to vote against the reelection of Non-Executive Director Iain McDonald, as the group claims he is an “affiliate” on the pay committee.
“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,” a THG spokesperson told Cosmetics Business.
“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.”
The rumoured shareholder revolt could further deepen THG CEO Matthew Moulding’s dislike of the London stock market.
The Manchester-based company's founder has previously stated that listing THG on the stock market in September 2020 was a “mistake”.
Moulding also hit back at the media’s negative coverage of his beauty company in April 2023, following a takeover proposal from US buyout firm Apollo.
In a LinkedIn post he targeted the British press, hedge funds and bank analysts, claiming that the trio “regularly build negative coverage” against UK listed companies.
He suggested that this practice is done by the three groups to bet on which share prices will fall.
THG would go on to reject Apollo’s takeover offer, stating that the firm had provided an “inadequate valuation” of the company.
The Lookfantastic and Glossybox-owner added it was more confident in its profitability in 2023 as an independent company.
“As stated in our recent results, with a strong balance sheet and category leading positions within substantial global end markets that continue to benefit from long-term structural growth, we have confidence in our ability to deliver long-term value for shareholders and remain on track to be cash flow positive in 2024,” said Charles Allen, Chair of THG at the time.
THG’s company valuation has declined from £6.5bn in September 2020 to £813m, however, and the group reported a 8.6% decline in sales for its first quarter of trading in 2023.
