After announcing just earlier this year that the office supply company would shutter 225 stores in the next year and a half, Staples executives will now ask investors to support its executive pay plan.
The catch: Staples has come under some investor fire for doling out bonuses to executives despite a poor 2013 financial performance, The Boston Globe reports.
Framingham-based Staples split up $500,000 between its four top executives. Staples revenue took enough of a hit last year—hence the plan to close stores and, inevitably, cut at least hundreds of jobs—that its executives did not qualify for bonuses.
So when shareholders vote on executive compensation today, it will largely reflect their appetite for such a system. The vote is nonbinding and Staples could go forth with the plan anyway. It was adopted by the company’s board in March.
We’ll see if getting shareholders on board proves easy. In the grand scheme of a major company like Staples, even during a struggle $500,000 doesn’t look like all that much. Had Staples seen a better year, it’s worth noting, bonuses would have been a lot bigger than the portion of half a million dollars the four execs stand to gain if they go forth with the plan. (In more successful years, Staples CEO Ron Sargent has seen bonus pay in the millions.)
However, the vote will come on the heels of a Chipotle shareholder vote last month wherein investors strongly voiced their disapproval of the company’s executive pay plan. That vote, too, was nonbinding, but companies are generally less likely to ignore such strong shareholder dissent, and Chipotle said it considered an executive pay plan that shareholders’ support was a “top priority.’’
Update: Staples shareholders voted against the executive compensation plan at the company’s annual meeting, the Globe reports.