Executive examines his own £2 million remuneration package
Games Workshop CEO Receives Controversial Bonus Amidst Shareholder Disapproval
In a move that has sparked debate, Kevin Rountree, CEO of Games Workshop, has accepted a significant stock-based bonus worth approximately £2.2 million. This bonus, payable in shares over the next three years if Rountree remains in his position and meets certain targets, has been controversial, with two-thirds of shareholders voting against the share awards plan for 2025.
The bonus scheme, which grants shares at a bargain price, could translate to potential gains of around £2.8 million for Rountree. This is a significant increase from his earnings of £1.5 million in the previous year, which rose to £4.4 million last year, according to reports.
The Games Workshop bonus scheme, compared to other FTSE 100 companies, is contentious because such lucrative awards often face shareholder resistance. While other FTSE 100 firms also use stock-based bonuses to align executives’ interests with shareholder value, the scale and timing of Games Workshop’s awards amid shareholder disapproval seem unusually generous.
Kate Marsh, chair of Games Workshop's pay committee, acknowledged that one-off payments can attract shareholder scrutiny. Rountree himself expressed reservations about the new bonus scheme, stating that "time will tell whether it improves Games Workshop's performance and whether it is the right change."
Despite the controversy, Rountree's focus remains on 'long-term success' rather than 'short-term gains.' The company's recent financial performance supports this stance, with Games Workshop posting a 30% rise in full-year profits to £263 million last week.
In a positive development, the company also announced plans to open more stores around the world after the success of Space Marine 2, a video game based on the Warhammer 40,000 franchise. As a gesture to its employees, Games Workshop also shared a £20 million cash bonus pot, with each employee receiving approximately £6,000.
The Games Workshop bonus scheme has triggered a debate about executive pay fairness and governance within the FTSE 100 companies. However, Rountree's stance appears to be aligned with the existing scheme, despite the controversy.
[1] Source: Various financial news outlets and shareholder meeting minutes.
With the gamut of controversy surrounding the bonus, Games Workshop's CEO, Kevin Rountree, is planning to invest part of his substantial earnings, approximately £2.2 million, in the company's future, using the finance sector to align his interests with the business. This decision, while met with apprehension from some shareholders, echoes Rountree's focus on long-term success instead of short-term gains.
