The Restaurant Group under fire from second activist investor over bosses' pay

A second activist investor in the Restaurant Group (TRG) has said it plans to vote against the pay packet of boss Andy Hornby next month.

New York-based Irenic Capital Management is the latest to take aim at Hornby, who has led the Wagamama and Frankie & Benny’s operator since 2019.

Under his tenure, shares have fallen by around 70% but Hornby’s salary increased to £674,450 for 2023. He also receives shares on a time-vesting basis.

Irenic, which is understood to have around a 1% share in TRG, has told the board to adopt a new model that more closely ties Hornby's pay with shareholder returns.

The investor said it believed Hornby was “capable” of unlocking the potential of TRG but that the current remuneration plan provided “little incentive to do so”.

It claimed the “only direct financial incentive” for Hornby was to increase overall profits which had led to “ill-advised acquisitions” such as the £7m takeover of Mexican chain Barburrito in 2022.

Earlier this week Oasis Capital Management, which has a 12.3% share in TRG, also announced it would vote against TRG’s remuneration policy at its annual general meeting (AGM) on 23 May and claimed Hornby’s “disproportionate pay” had “failed to promote value creation”.

TRG owns more than 400 UK restaurants under brands including Frankie & Benny's, Chiquito, Coast to Coast, Firejacks and Brunning and Price. It acquired Wagamama for £559m in 2018.

In March the company said it planned to close up to 35 further restaurants after pre-tax losses more than doubled to £86.8m, although the Wagamama brand would remain unaffected.

Irenic said it had told TRG’s board to change its remuneration policy to encourage Hornby to focus on Wagamama and dispose of its other sites “as quickly as possible”.

“Ultimately, the Restaurant Group should own just Wagamama and focus its efforts on growing that business,” Irenic said.

"The path forward at the Restaurant Group should be clear. Dispose non-core assets, de-lever, and grow Wagamama – a brand that has excellent unit economics and a substantial global runway. Performance of the Restaurant Group’s non-core assets has rebounded from the depths of COVID-19 and financing markets are open.

“There is no reason for further delay in an asset sale program. It is time to get on with it.”

TRG did not add to a statement issued earlier this week where it said it had “performed strongly” compared to the wider casual dining sector in recent years.

“Wagamama and pubs have consistently outperformed the market, leisure has been carefully restructured to maximise cashflow and we have successfully re-sized concessions so it is well placed to benefit as air travel continues to recover,” TRG said.

“As is normal, we are consulting with major shareholders ahead of our upcoming AGM on our remuneration policy."