The Restaurant Group plc (TRG) has today announced increased flexibility in its Banking facilities, Executive pay cuts and changes to its Board composition. The news comes after the company closed the Chiquito and Food & Fuel chains for good.
Extra Flexibility in Banking Facilities
TRG is pleased to confirm that the TRG Lending Group have agreed that there will be no covenant test at the half year. In addition, Santander have increased their super senior revolving credit facility to Wagamama from £20m to £35m, thereby adding an extra £15m to the Group’s overall debt facilities.
Executive Pay Cuts & Bonus Waivers
The Executive Directors have decided to reduce their base salaries for a period of three months from April 1st. Andy Hornby, Chief Executive, has volunteered to take a 40% pay cut, which reflects the core policy for senior members of the TRG team who are not being furloughed.
Kirk Davis, CFO, volunteered a pay cut and will see a 20% reduction for the same period. The smaller pay reduction for the CFO reflects the exceptional workload for the Finance function. These arrangements will be reviewed again on 1 July 2020.
Both Executive Directors have also volunteered to forego their bonuses for the 2019 financial year, which were due to be paid on March 31st 2020. The CEO was due to receive 37.5% of his salary (prorated to reflect his joining date of 1 August 2019) and the CFO was due to receive 30% of salary, which equates to £98k for the CEO and £109k for the CFO.
In light of the very significant number of colleagues in TRG sites that have been furloughed and the significant pay cuts taken by the Executive Directors, the Non-Executive Directors have also proposed to reduce their fees with effect from April 1st 2020 by 40%. This arrangement will also be reviewed again on 1 July 2020.
The Board is mindful of the rightsizing of the business that is currently taking place and has therefore also considered the size and composition of the Board, as well as the tenure of its members, concluding that it is timely to reduce the overall number of Non-executives from six to five.
As a result, Mike Tye has offered to step down as a Non-Executive Director and Chairman of the Remuneration Committee with effect from today. This will also allow him to concentrate on his other business and charity interests. The Board would like to thank Mike for the strong input he has provided since he joined the Board in April 2016 and wish him well.
Zoe Morgan, who is an experienced Chair of plc Remuneration Committees, will take over the Chair of this Committee with immediate effect.
Chief Executive Andy Hornby said, “These are unprecedented times for our business and our sector. Against this backdrop we have taken decisive action to improve our liquidity, reduce our cost base and downsize our operations.
'I would like to wholeheartedly thank all of my TRG colleagues for their extraordinary understanding and commitment during this period.”.