Oasis calls for shareholders to reject Restaurant Group CEO pay packet

Oasis Management Company, an activist investor in the Restaurant Group (TRG), has called for fellow shareholders to reject the company’s remuneration policy at its upcoming AGM.

The hedge fund said chief executive Andy Hornby’s “disproportionate” pay had “failed to promote value creation”, and claimed shares had fallen by around 73% since his’s appointment in 2019.

Hornby’s salary for 2023 increased to £674,450 despite the company remaining loss-making for the last four years, Oasis said. Under the renumeration policy he would also receive shares on a time-vesting basis.

TRG owns more than 400 UK restaurants under brands including Wagamama, Frankie & Benny's and Chiquito.

Oasis, which owns a 12.3% stake in TRG, has urged fellow shareholders to vote against the pay policy and re-election of Zoe Morgan, chair of the remuneration committee, at its upcoming AGM.

This would deliver “a clear message that the board’s approach to remuneration ignores shareholder feedback, fails to deliver value and should not continue”, Oasis said.

“Giving any chief executive the comfort of a disproportionately high base salary, as well as failing to include any performance criteria within the pay element responsible for incentivising long-term value creation, would be highly questionable at best,” the investor added.

“In the case of TRG, it can only be considered tone deaf and wholly inappropriate, serving only to further distance management from the experience of long-suffering shareholders who have endured damaging capital value destruction along with zero dividends or returns of capital since the current chief executive's tenure began.”

A statement from TRG in response said: “TRG has performed strongly compared to the 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. As is normal, we are consulting with major shareholders ahead of our upcoming AGM on our remuneration policy.”

In February, Oasis called on TRG to be more transparent with shareholders about plans to turn around its "ruinous and devastating" share price performance and for governance change at the company.

The following month, TRG communicated its medium-term strategic plan, including reducing its leisure estate, however Oasis described it as “underwhelming” and a “further demonstration of the board’s unwillingness to recognise the need for more fundamental changes”.

“TRG continues to be one of the worst-performing listed UK leisure stocks and we believe it will remain so until executive management is held to account and incentivized to perform,” Oasis concluded.