$792,700 welcome gift for Darty CEO likely to annoy investors

Reuters/London/BangaloreEurope’s No 3 electrical goods retailer, Darty, named a new CEO yesterday and gave him £500,000 ($792,700) in shares as a welcome gift, a move that could irritate investors who rebelled against the firm’s executive pay last year.Regis Schultz, 44, will join on May 1 from French furniture and electricals chain BUT, where he has been CEO since 2008. He is also a former chief operating officer of Kingfisher’s do-it-yourself business B&Q.Darty said the one-off award of stock equivalent to Schultz’s basic salary was to compensate him for losing a bonus and incentives he would have received at BUT. The shares will vest in full after three years, subject to Darty’s share price performance.Many investors frown on socalled “golden hellos”, arguing that compensating directors for incentive awards they might have had at a previous employer undermines the concept of schemes put in place to retain employment. It also argues they reward executives for jobs they have not yet done. Schultz will steer a turnaround plan at Darty as it battles weak economies and intense competition from online retailers.The plan, outlined in December, will see the firm focus on its profitable core businesses in France, Belgium and the Netherlands and try to eliminate losses at non-core businesses in Spain, the Czech Republic and Slovakia.Schultz, who as a youth was ranked as the 16th best tennis player in France, will succeed Dominic Platt, Darty’s finance director who had acted as interim CEO since Thierry Falque-Pierrotin stepped down in December.Falque-Pierrotin’s departure was prompted by an investor rebellion over executive pay that saw more than half of Darty’s shareholders vote against the firm’s pay report.A quarter of Darty’s equity is owned by activist investor Knight Vinke.Though Schultz’s basic annual salary is less than Falque-Pierrotin’s €1.04mn, he will be eligible for a yearly cash bonus of up to 125% of salary.Shares in Darty, up 41% over the last six months, were unchanged at 60.6 pence in late-morning trade, valuing the business at £319mn.Last February the group, formerly known as Kesa, sold its Comet business in Britain to private investment firm OpCapita. Comet has since closed down. In November, Darty sold its Italian business.Darty also said Bruno Cremel would step down as managing director of Darty France, the firm’s main business, “by mutual agreement” at the end of May.