Wagamama owner suffers shareholder revolt over salaries and appointments

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Activist hedge funds have led a shareholder revolt over executive pay and appointments at Wagamama owner The Restaurant Group, the latest skirmish in a campaign pushing for a reorganization and partial sale of the struggling casual dining operator.

Slightly more than 45 percent of the votes cast in TRGThe annual general meeting on Tuesday opposed the company’s pay report, which includes a salary of £675,000 for chief executive Andy Hornby as part of a remuneration package that allows up to 150 per cent of shares to be awarded in addition to his salary, regardless of participation. performance.

hornbyThe reappointment of the board was also opposed by about 16 percent of the votes cast, with nearly a quarter voting against the reappointment of Chairman Ken Hanna and Zoe Morgan, the director in charge of the company’s compensation committee. , respectively.

The revolt at the AGM is the latest development in an increasingly bitter fight over the future direction of TRG, which began earlier this year with Hong Kong-based fund Oasis Management. make it public about his shareholding in the company and complaining about TRG’s stock price.

Since then, several other funds have bought shares and gone further than Oasis by calling for TRG’s operations, which also include Italian-American restaurant Frankie & Benny’s and Brunning & Price pub chain, to be broken up and sold.

Activists control between 15 and 20 percent of the shares, according to Hanna; the main one is Oasis, which is the second largest shareholder with a 12.3 percent stake. Activists Irenic Capital and Coltrane are also among the top 20 shareholders.

Speaking at the meeting, Hanna described activist funds as “a vocal minority.” Fund manager Columbia Threadneedle, TRG’s largest shareholder, has publicly endorsed the administration. “Our job as a board is to try to . . . keep everyone happy. It’s never easy, but we’ll get through it,” Hanna said.

However, Hanna noted that management might be receptive to some of the activists’ demands, saying that “in due course, we will make some public announcements about our strategy.”

TRG’s share price is down more than 60 percent since its last capital raise in March 2021, as the casual dining operator battles rising costs and concerns about a slowdown in consumption.

Group-wide adjusted pre-tax profit was £20.3m last year, up 22% from the previous year when the business was hit by pandemic restrictions. However, comparable sales at Frankie & Benny’s, which in March announced the closure of 35 locations, fell 4 percent on-year.

But Hanna did not silence her detractors. Orkun Kilic, founder of Berry Street Capital, which owns about 1 percent of the shares, told the Financial Times that the board “has no respect for shareholder and stakeholder value.”

Kilic said the sale of some of TRG’s assets was “obviously necessary” but argued that management was “in conflict with itself because they think about their seats and they think about their egos.”

Daniel Wosner, managing director of Oasis, said he was “very pleased” that the shareholder base had “come out in force to share their discontent.” [over executive pay]”.

But Kilic, who previously launched an activist campaign with Oasis focused on manufacturer Premier Foods, said he feared there could be a “stalemate” between activists and management unless an asset sale occurred soon.

TRG acknowledged the “significant” shareholder revolt in a statement and said the company would continue to consult with investors to find an “appropriate solution” on the payment. “We remain firmly focused on executing our margin accumulation plan,” he added.