Vodafone top two take 20% bonus cut due to rubbish share price
Chief Exec Nick Read, and Chief Financial Officer, Margherita Della Valle are taking one for the team because Vodafone hasn’t been performing.
Vodafone’s share price is down 15% since the start of this year, 19% since Read took over at the helm and 44% since the start of 2018. Corporate tradition is for senior execs to get massive bonuses regardless of how badly their company is performing, while still attaching strict performance conditions to their underlings’ variable pay.
Possibly in anticipation of a looming shareholder meeting Read and Della Valle voluntarily requested the 2020 conditional share package they were recently awarded be cut by 20%. “This was requested to reflect the low valuation of the share price following its reduction over the year and particularly the change in value between the date of the Remuneration Committee’s decision in respect of the value of the Awards and the date of grant,” said the Vodafone announcement.
Of course they’ll still get 80% of the award so long as they meet whatever conditions are required for the payout. These weren’t detailed in the announcement but since they’re usually no more tricky than not resigning or getting sacked, let’s assume they’ll get them in full. So that means Read will get 3,887,636 shares and Della Valle 2,366,387, which equates to around £5 million and £3 million respectively.
You could argue that the dynamic duo inherited a lot of the aggro that has befallen them since they took over, such as the India situation. But Read was previously the CFO and Della Valle his deputy, so it’s not like they didn’t have a major hand in it. But they seems to be headed in the right direction in the UK, at least, so maybe they will look back on this moment as their nadir.