Hudson’s Bay Co. shareholders approved a plan to pay chief executive Helena Foulkes $29.4 million, a decision that would make her among the highest paid executives in Canada.
Shareholders voted on the HBC’s approach to executive compensation for the 2018 financial year during Wednesday’s annual meeting, which was closed to media. While the non-binding vote on the pay package plan passed, 26.5 per cent of shareholders had voted against it. According to HBC documents, the board "will take the results of this vote into account when it considers future compensation policies and issues."
Foulkes, who joined HBC last February, has been tasked with turning around the struggling retailers performance. Throughout her tenure, she has repeated that “everything is on the table” when it comes to improving HBC’s operations and, so far, she has made several bold moves. Some of those include selling its Gilt deals website, shuttering its Home Outfitters business in Canada and shrinking the Lord & Taylor department store chain’s footprint.
In an information circular released to shareholders last month, HBC said that the company needed to provide Foulkes – who was previously president of CVS Pharmacy in the U.S. – with a one-time new hire stock option, which would incentivize her to create value over the long-term.
“In order to attract Ms. Foulkes, the (Human Resources and Compensation Committee) determined that it was necessary and in the best interest of the company to provide a one-time new hire grant of stock options to create alignment with shareholders’ interests, and incentivize the CEO to drive long-term value creation,” the company said in its information circular.
Foulkes compensation plan includes a base salary of $1.6 million, an annual incentive plan that brought in $5.7 million, and share-based awards that totalled $19.6 million.
“The one-time bonus and (long-term incentive) awards provided to Ms. Foulkes to make up for compensation forfeited due to her resignation from her former employer will not be provided in future years,” the company said.
HBC barred media from its annual general meeting Wednesday and did not stream the proceedings via webcast, moves that signalled a departure from previous years, according to archived webcasts on its website.
Foulkes’ compensation would make her the second-highest paid CEO in Canada based on 2017 data compiled in a report by the Canadian Centre for Policy Alternatives. In 2017, when the most recent data is available from, the highest paid chief executive was HBC’s Richard Baker, whose compensation topped $54.8 million, followed by Magna International Inc.’s Don Walker ($26.4 million). The highest paid woman on the list was Linamar’s Linda Hasenfratz, who was paid $16.5 million.
The decision about executive compensation comes as HBC considers a controversial go-private offer from a majority group of shareholders.
This week, activist shareholder Land & Buildings Investment Management LLC slammed the proposed offer from the majority shareholder group, calling the bid “woefully inadequate.”
In a letter sent to HBC’s special committee reviewing the bid, Land & Buildings founder Jonathan Litt urged the company to explore other transactions that could “maximize value for all shareholders.”
The letter points to a statement made by Foulkes last year that pegged the value of the company’s real estate at $28 per share – well above the go-private offer of $9.45 per share.
The group of shareholders, which includes HBC’s former CEO and now executive chairman Baker, controls 57 per cent of the company’s shares.
With files from the Canadian Press