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Mon 2nd Dec 2013 - Breaking News - Spirit chief executive pay drops; premium Chef & Brewer trials underway
Spirit chief executive pay drops; premium Chef & Brewer trials underway: The remuneration of Spirit Pub Company chief executive Mike Tye dropped in 2013 to a total of £795,000, including a bonus of £178,000 and pension payments of £104,000 on top of a basic salary of £475,000 – the year before Tye earned a total of £940,000. Tye’s bonus was 25% of the maximum – he is entitled to receive as much as 150% of basic salary and any bonus is dependent on reaching 95% of budgeted profit before tax. Finance director Paddy Gallagher earned 20% of his potential bonus, £65,000, on top of his basic of £325,000 to earn a total of £405,000, down slightly from the £409,000 he earned the year before. Next year Spirit’s remuneration committee is to narrow the financial performance target range “reflecting the challenges faced by the company”. The bonus threshold will be increased from a minimum profit threshold of 95% to 98% of budgeted performance and the upper threshold for the maximum payment will be dropped from 110% to 108%. In the annual report, published today, Tye stated: “We continue to make progress towards our ambition of being the number one hospitality company in the UK. It has been a year of further improvement in the business. Profit before tax is up 6%, earnings per share are up 9% and we have increased our dividend by 5%. We have delivered robust sales growth in our Managed business despite trading through a continuing tough consumer environment and the worst of the British weather, with a very wet autumn and winter followed by the coldest spring for over 50 years. Costs were again well controlled and this is reflected in further margin improvement in our Managed estate. In line with our expectations, performance in our Leased estate is now stabilising as we continue to combine investment and innovation in our operating agreements with robust performance management. We expect the consumer environment to remain challenging but remain confident that our strategy positions us well for future growth. In our Managed estate we continue to focus on executing our strategy of creating compelling brands and pubs and investing in the talent and leadership skills of our people to execute flawlessly for every guest. We have increased our like for like sales by 12% over the last three years and improved EBITDAR margin by 390 basis points as sales growth has been accompanied by productivity gains and cost efficiencies. We have continued to invest in our brands, our people, our properties and our infrastructure, with discipline and focus on returns the priorities for our capital spend. We recognise the importance of evolving our existing brands and innovating to position our offers in line with emerging market trends. As a result, this year in our Managed estate we have launched our first premium pub concept, developed a smaller footprint Flaming Grill, begun trials of a more premium Chef & Brewer and started work on segmentation of our Taylor Walker estate to cater for both our tourist and residential guests. All these developments reflect the increasing polarisation of the market between value and premium offers. We also completed the roll-out of our new EPOS and back office systems in December 2012, with the benefits already being realised in our improving margins, and have continued to invest in our social media, digital marketing and customer relationship marketing capability as we see these areas as key future growth drivers for our business. In our Leased estate we have begun to address the lack of investment and innovation in the estate, with 105 investment schemes completed in the year, including 15 trials of new operating agreements that allow us to exert greater influence over the retail offer and create future growth potential for both ourselves and our licensees. The growing reputation and quality of our Leased estate is attracting a higher quality of licensee that bodes well for the future. Overall, I am pleased with the improvements we have made in the year, and we enter the new financial year with good momentum, confident in our ability to achieve our ambition.”
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