Compass Group, the FTSE-100 catering giant which counts the Wimbledon tennis championships among its most prestigious contracts, is in talks with its investors about increasing its boss’s potential pay package by millions of pounds a year.
Sky News has learnt that Compass is consulting its biggest institutional shareholders about substantial hikes to the annual bonus and long-term share award it can hand to Dominic Blakemore, its chief executive since 2018.
City sources said on Wednesday that Compass was proposing to increase both the annual bonus, which pays out a maximum of £2.3m to Mr Blakemore, and the LTIP (long term incentive plan), which has a maximum annual grant value of about £4.6m.
A consultation process with leading investors is said to have been under way for weeks, with a view to its revised remuneration policy being voted on at next February’s annual meeting.
The consultation also covers the reward package available to Petros Parras, Compass’s chief financial officer, and Palmer Brown, its group chief operating officer, North America, where the company now generates two-thirds of its revenue.
Mr Blakemore earns a basic salary of £1.16m, having been granted a 5.9% rise which took effect on 1 January.
Last year, he was paid almost £7.5m – more than double what he earned during the previous 12 months.
A source close to the company pointed to Compass’s recent financial performance, with data showing that it has delivered a total shareholder return of 53% since Mr Blakemore became CEO – compared to 30% for the FTSE-100 index.
Earnings per share have also grown by 19% during the same period.
Compass’s proposals to increase his maximum pay package come amid an intense debate about the competitiveness of FTSE-100 executives’ compensation.
A number of companies, including Flutter Entertainment, have moved their primary listings to the US, while the chief executive of the London Stock Exchange has argued that a corporate drift across the Atlantic is likely to continue unless British-based CEOs are paid comparably to their American peers.
Mr Blakemore is a non-executive director of the LSE’s parent company, London Stock Exchange Group, which itself has secured investor backing in recent months for a sharply higher remuneration package for its CEO.
High pay campaigners argue that UK company bosses are already paid too much given the average worker’s salary in Britain.
One investor who has been involved in the consultation process said they were supportive of Compass’s proposals.
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The company has performed strongly since the COVID-19 crisis, when it was forced to raise £2bn from shareholders amid a near-total shutdown in its activities.
Compass, which employs hundreds of thousands of people around the world, said at the time that its cash call was partly aimed at fuelling acquisitions in the pandemic’s aftermath.
Earlier this year, it struck a £400m deal to buy CH&Co, which provides hospitality services at Kew Gardens and the Royal Opera House.
The stock it sold in 2020 was issued at 1,025p, and has since more than doubled, reflecting the enormous bounce-back enjoyed by parts of the catering and hospitality sectors.
On Wednesday, shares in Compass were trading at around 2,400p, having risen by over a fifth during the last 12 months.
The company now has a market capitalisation of more than £41bn.
Compass declined to comment.
