Executive directors at The Restaurant Group – owner of Wagamama and Frankie & Benny’s – are to forfeit bonuses collectively worth more than £200,000 and take temporary pay cuts as the company battles the coronavirus fallout.
Chief executive Andy Hornby (main image) and CFO Kirk Davis both volunteered to forego their bonuses for the 2019 financial year, which were due to be paid last week.
Mr Hornby was due to receive £98,000, the equivalent of 37.5% of his salary prorated to reflect his joining date of 1 August 2019, while Mr Kirk was set to take home £109,000, the equivalent of 30% of his salary.
The pair have also decided to reduce their base salaries for a period of three months from 1 April.
Mr Hornby has volunteered to take a 40% pay cut, which reflects the core policy for senior members of the TRG team who are not being furloughed.
Mr Davis will see a 20% reduction for the same period. The smaller pay reduction for the CFO reflects the “exceptional” workload for the finance function, the company said.
The arrangements will be reviewed again on 1 July 2020.
In light of significant number of employees in TRG sites that have been furloughed and the pay cuts taken by the executive directors, non-executive directors at the group have also proposed to reduce their fees with effect from 1 April 2020 by 40%. This arrangement will also be reviewed again on 1 July 2020.
Additionally, non-executive director and chairman of the remuneration committee, Mike Tye, has resigned following the board’s decision to reduce the overall number of non-executives from six to five.
The overhaul of the pay structure for the most senior management figures come as the 650-strong group fights against falling revenue in the wake of Covid-19.
It has conducted a review of the performance of all its business divisions over the last few weeks, with a particular focus on the expected future cash generation profile of each segment.
Meanwhile, the company has announced extra flexibility in its banking facilities after TRG Lending Group agreed that there will be no covenant test at the half year.
In addition, Santander has increased its super senior revolving credit facility to Wagamama from £20m to £35m, thereby adding an extra £15m to the group’s overall debt facilities.
Mr Hornby said: “These are unprecedented times for our business and our sector. Against this backdrop we have taken decisive action to improve our liquidity, reduce our cost base and downsize our operations. I would like to wholeheartedly thank all of my TRG colleagues for their extraordinary understanding and commitment during this period.”