02 June 2019

A few days ago a third of shareholders at Lookers’ AGM went against the remuneration package earlier recommended by the board, presumably in protest at the near 20% pay rise given to chief executive Andy Bruce. Tellingly though less than 0.5% voted against his re-election…

By coincidence the news broke at a similar time to yet another report from the motor trade saying how hard it is to first recruit and then retain quality staff.

Well, it’s just a thought but is giving staff a financial stake in the business more than their monthly pay cheque one way forward?

You may have read that employees working for the Richer Sounds hi-fi and TV retail chain were recently handed shares in the company to be managed by an employee trust. John Lewis and Waitrose both operate a partnership model and the Labour party has been talking about bigger firms, those with 250-plus staff, handing over 10% of shares to those who help create the wealth and value of the company. The details of how precisely this might work are yet to be ironed out and existing shareholders may not be so chuffed but you get the drift.

I used to write for a large and in those days enormously profitable newspaper group and it always rankled with me and many others that a tiny handful of people at the top got share options and performance related end of year bonuses while those lower down the food chain, people who worked just as hard and in their own areas were every bit as accomplished, got one half of damn all.  In my years there the staff turnover was huge as many voted with their wallets and went to papers more ready to reward their talents.

In contrast I know of a small but hugely successful Fiat retailer who counts his staff as his family and rewards them accordingly. The only time anyone leaves is when they retire or move from the area and the managing director describes his approach as nothing more than sound business. He benefits from the staff’s experience, their links with customers and yes, that willingness to go the extra mile knowing that their hard work pays dividends. Literally.

The idea of a business being a collective may not sit easy with many entrepreneurs but at a time when recruitment and retention of skilled people is hard, might it be worth considering?

Soaring executive pay and an imbalance in rewards is an issue. As a number of Lookers shareholders made clear.

John Swift

Editor

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Tags: Lookers, shareholders