SIG chief executive Steve Francis is in line to receive a £375,000 one-off payment four months after joining the firm.
The payout is linked to the £165m cash call the materials supplier is making to shareholders. The company has argued that Francis has “developed a compelling new strategy” for the group, strengthened SIG’s management with new appointments and is expected to lead a successful capital raising. “As a result the company is expected to be financially more soundly based and in a position to execute its new growth strategy, thus providing the opportunity for significant shareholder value creation,” it said.
Francis, who was named CEO at the end of April after being brought in on an interim basis in February, will invest £150,000 of the payout in SIG shares as part of the deal. The company said this would see him “further aligning himself with shareholder interests”. The payment is outside his standard remuneration and will have to be approved by shareholders at a general meeting on 9 July. If the resolution is not passed he will not buy any shares in the new capital raising exercise.
The CEO’s base salary for 2020 is £550,000. Francis, along with the other executive directors took a 50 per cent cut from 1 April in response to the disruption caused by COVID-19. This was reduced to 80 per cent in mid-May and is scheduled to return to 100 per cent next month.
Francis has a reputation of being a turnaround specialist taking on distressed companies. The most high-profile of these was Patisserie Valerie where he stepped in as CEO on 15 November 2018, a month after potentially fraudulent activity was discovered and its shares suspended. He brought in a new team to try and rescue the business but it collapsed into administration in late January 2019. Francis helped to find a buyer for the company, which was sold to Causeway Capital Partners in February that year.
In an announcement on Friday, SIG said it had managed to save or defer around £19m of cash payments since the start of the pandemic thanks to government support schemes and cost cutting. In the UK it has taken advantage of the job retention scheme and furloughed around 2,000 staff, which contributed to around £8m of cash savings. Most of the staff have now returned to work. The company said it is considering whether to apply for government-backed loans.
Francis took over as interim CEO on 25 February when SIG’s former CEO and chief financial officer both left after a poor 2019 for the company. In May it revealed a £112.7m pre-tax loss for the year, with just over £90m of this an impairment of goodwill. The company has lost almost 75 per cent of its market value in the past 12 months.