20 February 2020
DIXONS CARPHONE PLC
Further statement in relation to AGM vote on Directors' Remuneration Report
The Board of Dixons Carphone plc (the "Company") welcomed the 76.54% vote in favour of the 2018/19 Remuneration Report at the Annual General Meeting ("AGM") held on 5 September 2019 although acknowledge that a significant minority of shareholders did not support this resolution.
In addition, the Board welcomed the support received from most of the Company's largest shareholders and the 89.26% vote in favour of the Remuneration Policy.
The Company explained in its AGM Results announcement the action it intended to take to understand and address shareholder concerns about the Remuneration Report and an update is provided below.
Since the AGM, the Company has sought further engagement with our shareholders and the proxy agencies to discuss the specific rationale for the votes against our Remuneration Report. As part of this engagement, the Company has either met with, or written to, shareholders representing over 70% of the Company's share capital and invited them to attend meetings with their choice of the Group Chairman, Chair of the Remuneration Committee or Chair of the Audit Committee. In addition, the Company commissioned a voting analysis report to identify those shareholders that had opposed resolutions at the AGM. Additional engagement requests have been sent to those shareholders that did not support the Remuneration Report but had also not accepted the Company's offer to meet.
The concerns expressed by those shareholders and shareholder advisers that have provided feedback related to:
· the level of bonus payments for 2018/19 given the assessment of business performance; and
· the number of shares in the 2019 LTIP award given the lower share price.
In the context of the concerns raised, the Remuneration Committee recognises that 2018/19 remuneration was a difficult judgement at this point in the business transformation. The Group Chief Executive and Group Chief Financial Officer joined the business in April 2018 and August 2018 respectively and delivered the financial targets for 2018/19 in line with the Company's guidance issued in 2018.
In addition, the Group Chief Executive and Group Chief Financial Officer both deferred 100% of their cash bonus for 2018/19 into share awards that will not vest for 2 years. The executives volunteered to do this as they were mindful that the performance of the business and the progress that is being made with the transformation had not been reflected in the Company's share price and wanted to align themselves with shareholders.
Finally, the Company did reduce the allocation of LTIP shares from 275% to 250% of salary one year ahead of the implementation of the new Remuneration Policy.
The Company continues to believe that the 2018/19 Remuneration Report and Policy were appropriate in the context of incentivising a new management team embarking on a major transformation of the business.
The Company's Remuneration Committee and the Board have welcomed the opportunity to have constructive discussions on remuneration with our shareholders. The Remuneration Committee will consider the feedback received during this process when assessing future performance and awards.
The Company will provide a final update in the 2019/20 Annual Report and Accounts.
