In addition to the £1M bonus, Philips received his basic salary of £850,000, pension benefits of £213,000 plus additional benefits of £28,000.
The report noted the ousted boss – who stepped down on February 16 2015 – received the money in respect of salary, benefits and pension for the unworked portion of his 12-month notice period, “paid in instalments and subject to mitigation”.
‘Dalton was a good leaver’
He deserved the payment for his contribution to the business during challenging times and for his help in handing over the reins of power to new ceo David Potts. “Taking into account his contribution to the business through a period of significant industry change, as well as the importance of ensuring a smooth transition, the [remunerations] committee determined that Dalton was a good leaver for the purposes of his incentive rewards,” noted the report.
The £1M bonus payment covered Morrisons’ 2014/15 performance and he will also for deferred shares covering financial performance during 2011/2012. He remains eligible for uninvested long-term investment programme rewards; subject to performance on a pro rata basis for his time at the helm.
But not everyone associated with Morrisons has been so impressed by Philips’ performance as the remunerations committee.
Dalton Philips’ pay packet
- Basic salary: £850,000
- Bonus payment: £1M
- Pension benefits: £213,000
- Additional benefits: £28,000+
- Total: £2.1M
Former Morrisons’ chair Sir Ken Morrison famously slammed Philips’ recovery strategy for the beleaguered retailer at the firm’s annual general meeting in June last year. After listening to the then-ceo outline his recovery strategy, Morrison told him: “When I left work and started working as a hobby, I chose to raise cattle.
‘More bullshit than me’
“I have something like 1,000 bullocks and, having listened to your presentation, Dalton, you’ve got a lot more bullshit than me.”
Some analysts subsequently pointed out the retail chain was a much less complicated business when Sir Ken was at the helm. Earlier this week, Sir Ken was reported to have lost £167M last year as the value of his shares in Morrisons plunged.
Former property director Roger Owen accused Philips in January of being responsible for “butterfly thinking” by the company’s directors. “My brutal assessment is that Dalton Philips should have gone at least two-and-a-half years ago,” Owen told BBC 5 Live.
Philips joined as chief executive in January 2010 and stepped down at the end of March this year. His successor David Potts is being paid the same basic salary of £850,000.
The retailer’s chairman Andrew Higginson, who joined the firm in January, is paid £400,000 a year.
Meanwhile, do you think Philips’ £2.1M pay out was justified? Test your view against those of others in the poll below.
Did Dalton deserve his £1M bonus and £2M pay check?
Yes: He worked hard to turn Morrisons around. Why not?10%
No: Why reward failure?53%
Yes and no: He should keep his basic salary but not the bonus.31%