Woolies' Corbett waives bonus

WOOLWORTHS executive chairman Gerald Corbett today said he would waive his impending bonus of more than £187,000. He had been entitled to a windfall equal to 50% of his £375,000 annual salary.

A Woolworths spokesman said Corbett told a board meeting on Tuesday that he would not take the bonus because the company's falling profits meant its store managers would not qualify for theirs. But no public statement was issued.

News of Corbett's decision came less than 24 hours after a Woolworths spokeswoman told the Evening Standard's Business Day section that Corbett remained in line for the bonus despite the company issuing two profits warnings since being spun out of Kingfisher six months ago.

The spokeswoman said Woolworths' dismal financial performance, including its failure to cash in on the Christmas spending boom, did not mean Corbett would be denied his discretionary annual cash bonus.

Woolworths said today: 'On Tuesday Gerald told the board that because store managers would not get a bonus, he would waive his bonus.' It said Corbett would have qualified for the bonus, though no one had calculated whether he would have got the maximum amount payable under his contract. Corbett, who was paid a £500,000 bonus by Kingfisher for overseeing the demerger, has a contract that allows him to be paid a bonus of up to 50% of his salary.

The spokesman said the target reflected a combination of the company's share price, earnings and debt and stock positions. Woolworths also confirmed that Trevor Bish-Jones, who has just replaced Corbett as chief executive, stands to collect a discretionary bonus equal to half of his £375,000 salary.

Corbett's decision to waive the windfall may remind shareholders of last year's furore at Marks & Spencer, when the company considered paying chairman Luc Vandevelde a bonus of £816,000. Marks & Spencer said then that Vandevelde had hit his 'strategic and qualitative' targets. However, the move met fierce opposition from the retailer's customers and shareholders and also angered M&S managers. The outcry prompted Vandevelde to waive his payment.

The decline in Woolworths' sales has prompted analysts to slash their pre-tax profit forecasts from £53m at the time of its float to about £15m for the year to 2 February, 2002. Corbett has sparked controversy in the past - he received £1.3m when he finished as Railtrack's chief executive.