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Thu 15th Dec 2016 - M&B executives miss out on annual bonus after failing to hit financial target
M&B executives miss out on annual bonus after failing to hit financial target, company annual report reveals: Mitchells & Butlers executive directors have missed out on their annual bonus after failing to hit their financial targets, the company’s 2016 annual report has revealed. M&B has changed the financial metric of its bonus scheme this year, with the bonus based on operating profit rather than profit before tax. This made up 75% of the payout, with the remaining 25% based, as previously, on guest service as measured by the Net Promoter Score (NPS). The operating profit target was £335m but the company made £318m. While the NPS target of 66% was achieved with 67.1%, no bonus was payable because the threshold level of financial performance had not been achieved, this being £328m. The report also showed chief executive Phil Urban and finance director Tim Jones’ salaries will remain at £510,000 and £426,500 respectively for the 2017 financial year. This year, Urban received total remuneration of £613,000 consisting of his salary, £15,000 in taxable benefits and £89,000 in pension-related benefits. Jones received a total of £515,000 made up of his salary, £15,000 in taxable benefits and £75,000 in pension-related benefits. The report also included the pay ratio between the chief executive and the median pay of other employees, which is 1:44. In the report, remuneration committee chairman Imelda Welsh said: “The 2016 annual bonus plan had two elements, adjusted operating profit and guest service. Reported operating profit of £318m was short of the threshold level set by the committee and therefore no bonus under this element was payable. No changes to the remuneration policy are sought this year. The annual bonus plan will continue to be based 75% on operating profit and 25% on guest service. The committee will continue to set demanding targets for both operating profit and guest service. The threshold at which a bonus will begin to accrue will be set at 95% of target, slightly lower than in 2016, reflecting the demanding nature of the target set by the committee. Maximum payment for the operating profit element will be for achievement of 105% of target, increased from 103% in 2016. The amounts payable at threshold, target and maximum remain unchanged from 2016. In line with emerging best practice, the committee has decided to include the pay ratio between the chief executive and the median pay of other employees. Based on the chief executive single figure (total remuneration) the ratio of pay to the median of all other employees is 1:44. In assessing our pay ratio versus likely ratios from industry peers, we believe we are towards the lower end of the range but note that annual and long-term incentive payments have varied considerably among this group.”


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