In a surprising movement, Supergroup has announced the freeze of its board member’s salaries. The group, owner of Superdry and Cult brands, thus channels into Britons’ austerity mode despite a highly impressive first 12 monthsof trading as a public company, according to the business’s annual report.
The firm’s revenue has risen by 71% in the past year, according to its annual report, while underlying profit also rose by 88% from £26.7 million to £50.1 million. Nevertheless, and without taking into account the substantial pay rise when Julian Dunkerton took the company public last year, he has decided to impose a pay freeze across the whole board this year. Dunkerton earned £59,000 in the year before his firm’s listing on the London Stock Exchange.
Underlying profit before tax at the group jumped £23.7 million to £50.2 million between 2010 and 2011, or in other words, posting a 110pc leap in profits following a massive push abroad. However, earlier this year Supergroup admitted to having supply chain problems, resulting in the full range of summer stock being slow to appear in stores across the UK and preventing the company from capitalising fully on the unseasonably warm spring weather experienced across the country.
In his introduction to the annual report, Supergroup Chairman Peter Bamford acknowledged there were a number of areas where this growing business – and one of the retail success stories of the last 18 months – can still improve.“We have reviewed all aspects of our infrastructure over the last year and agreed a number of investments and developments,” he said. “In order to support our growth and run our business efficiently, improvements are required to our IT systems and to our merchandising, sourcing and supply chain processes.”
The later somehow explains the unexpected decision to freeze top execuitves’ salaries for the coming 12 months. Explaining Supergroup’s pay policy, the annual report said: “As a result of the executive directors’ significant shareholdings in the company and commitments to retain shares, the remuneration committee believes that individuals are sufficiently incentivised to mitigate the need to offer annual or long-term incentive arrangements at this point.
“The remuneration committee will keep this policy under continuous review.” It did reveal however, that changes will be made to the pay structure for those senior executives directly below board level, in order to recruit, retain and incentivise employees who do not have a significant shareholding in the business. Annual bonus and long-term incentive arrangements for certain senior execs have therefore been introduced, while private medical cover and life insurance have been issued to others.
In short, since last year, founder of the company was paid £400,000 and benefits, including medical insurance and a car allowance, of £18,745, while CEO of Wholesale & International Theo Karpathios and Brand & Design Director James Holder each pocketed basic pay of £300,000.
Finance Director Chas Howes was the next highest earner on the board with a salary of £225,000, which was also the pay level of Chief Operating Officer Diane Savory who quit her role at the company in May this year. She received a pay-off of £112,500, which she is currently receiving in equal monthly instalments until the end of 2011 and equates to around six months of base salary.