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LONDON - Debenhams Group (DEBS.L) announced on Thursday a new executive compensation plan designed to reward its leadership team for turning around the company’s performance, opting to implement the scheme without seeking shareholder approval.
The Group Turnaround Scheme (GTS) will deliver 6% of the market capitalization growth to participants if the company’s share price rises from £0.35 to £3.00 over a five-year period. The plan primarily benefits CEO Dan Finley, who will receive 66.67% of the potential payout, worth up to £148.1 million if maximum targets are met.
The scheme includes three measurement dates at years three, four, and five, with vesting determined by the trailing 30-day average closing share price. Awards that vest at the first two measurement dates will be subject to 12-month hold periods.
To achieve full vesting, Debenhams’ market capitalization would need to reach approximately £4.2 billion, representing a 25.9-fold increase from the current share price of 10.5 pence. The company stated this would require a minimum 92% compound annual growth rate.
The remuneration committee said it conducted consultations with shareholders representing 36% of voting rights before finalizing the plan. However, the company decided against putting the scheme to a shareholder vote, citing no legal requirement to do so and concerns about a "major competitor who is a significant shareholder" that it claims has sought to "disrupt the Debenhams Group’s growth strategy."
Debenhams reported £41.6 million in adjusted EBITDA for fiscal year 2025 and highlighted recent achievements including a £39 million equity raise and securing a new £175 million finance facility.
The maximum potential dilution for existing shareholders under the GTS is approximately 5% if all targets are met. CFO Phil Ellis will receive 6.67% of the plan, worth up to £14.8 million at maximum performance.
According to the press release statement, Debenhams founder Mahmud Kamani will not participate in the scheme.
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