Countrywide’s executive chairman Peter Long could be facing a humiliating shareholder revolt.
On Tuesday, August 28, Countrywide’s £140m rescue plan is due to be rubber-stamped by shareholders.
But Sky News has reported that leading City institutions are planning to oppose a new incentive scheme that is part of the emergency fund-raise.
Long could receive stock worth over £6m under Countrywide’s new Absolute Growth Plan.
Group managing director Paul Creffield could get £8m, and its chief financial officer Himanshu Raja could receive £7m.
According to Sky, a number of big shareholders have said they will vote against the plans, but are not hopeful of blocking them because they are backed by Oaktree, which owns 30% of Countrywide’s shares.
Long has already faced one major shareholder revolt, at Royal Mail, which he also chairs.
More than 70% of shareholders voted against the pay package of Royal Mail’s new chief executive, and around one third voted against Long’s re-election.
According to Sky, Institutional Shareholder Services said Countrywide shareholders should vote against the new Absolute Growth Fund which it called “excessive” and “unduly complex”.
Long earns £360,000 a year in his role as executive chairman at Countrywide, up from the £180,000 he earned as chairman before the departure of CEO Alison Platt in January. He also gets £300,000 from Royal Mail and last year earned £187,000 from travel group TUI where he is deputy chairman.
Yesterday, Countrywide’s shares closed – about an hour after the Sky News report – very slightly down to finish at 14.4p.
Countrywide’s market cap was put at £75.6m, far less than the £140m fund-raise which is needed to pay off about 60% of Countrywide’s £200m-plus debt mountain.
Today marks a deadline for Countrywide’s rescue plan, with applications to invest having to be in by 11am. On Tuesday next week, Countrywide is due to announce take-up.
https://news.sky.com/story/city-fury-at-share-bonanza-for-crisis-hit-countrywide-bosses-11474103
Comments (20)
Sorry to be the little boy at the back of the crowd pointing out the king is in the altogether but there is very obviously an anti Long campaign being stirred up. I don’t know what that’s all about, who’s behind it or why but it certainly has a unpleasant whiff to it. Whether or not it is justified I don’t know.
Countrywide have be driven down a cul-de sac a bit like an HGV driver following sat nav directions down an impassable country lane, they got caught up in the group think madness that service industries can be disrupted, a bit like retail shopping and banking has. Fee erosion could well break agency but it won’t ever profitably disrupt it
By definition agency is the most intimate contractual relationship most ordinary people will ever enter, other than marriage; the fiduciary obligations of an agent to their principal, laid down in well established case law go way beyond anything else I can easily bring to mind, so the thought estate agency can be done properly and well by people operating as passive intermediary listers is flawed at the most basic and obvious level.
Every single listing taken by a passive intermediary lister who claims to offer a full estate agency service is subject to a six year limitation period whereby every successful and unsuccessful vendor has the opportunity to come back and say, the advice you gave me was negligent, you failed to act, you are liable for my loss.
With Purplebricks sat there at £3.00 a share, with the very real possibility mis-describing the service they offer has created an almighty liability to their entire client base that will take a 6 years to work through and with Countrywide having only been paid for their successes providing very little exposure to dissatisfied clients available at under 20p I am fairly certain I know which stock I would go for.
Mr. Creffield and Mr.Raja have a massive job to do, a job that will require respect and confidence in them. If they pull off a recovery they are both worth every penny they have either negotiated or been offered because that is the cost of employing the people able to sort out the problem. A problem that has been created by a whole tier of the industry and it’s investors not properly understanding the basics of the property industry.
Where have thumbs up gone?
Thumbs were bought by Allison Platt apparently, as part of the Countrywide acquisitions.
Who knew?
Some banks will continue to fund this as they will end up with leases if they don’t. I tried a management buyout some years ago for some of the cornerstone branches. Our solicitors at the time advised us of section 22 of the building societies act. (Remember Nationwide owned some branches) as did B&B. Basically the B/S has to stand behind the lease if CW goes pop.
They will need to fund those leases and make up for the lost mortgage business. So despite all the woes CW are in a safe place…ish.
An honest comment hodge but so far as I am aware Countrywide sold off all their Freehold offices long ago so currently sit on 800 plus leases although many are holding over I understand. Easier to walk away therefore if need be and no doubt they have been looked at pretty closely if currently loss making as there must still be someone left at CWD who knows how to manage a business?
Thats the point, they are leaseholds and the building societies are standing behind some of them.
What?? I’m sorry, WHAT??!!?
Once they have managed to get it back up and running at a profit, then yes, a bonus would be in order, but not when they are steering the ship straight towards the flipping cliff!
It is interesting to note that the proposed incentive package is at least 2x higher than the entire senior management team (imperfect as they were before anyone feels the need to say so) which built the business from very little to over £1bn when it was sold, debt free to Apollo received on sale. The Chairman during the whole journey drew no fees and never participated in option packages which were widely distributed to senior staff. One feels it likely that the Cwd board of directors are about to score another dreadful own goal.
I agree makes a very interesting point.
What is the reason for this? – Is it investing and remuneration for BODS has changed and it is more about potential as opposed to t/o or actual profit?
The same with PB share price, i just don’t understand it.
You now have Russell Quirk talking about float with a valuation of 500 million!
I mean a CW being sold today, with zero debt and profits ….. What would it be worth?
This Long chap must have the hide of a Rhino given he has overseen a total car crash of both the company and the share price over the last 3 years and now he is happy to trouser a potential 6 million pounds bonus if the share price/profit approaches the figures of 3 years ago! Why on earth would anyone serious lend their support to this lunacy? Absolute Growth Plan???? Absolute Cr*p!
Jobs for the boys
Raising £140 million so they can give £21 million to three people, seems reasonable.
Imagine having your commission cut, year end bonus not paid then reading that. Not exactly motivational.
You couldn’t make this up could you? These 3 cannot seriously believe this is the right thing to do and then expect the majority of investors and staff to be comfortable with it after what they’ve been through? No wonder Countrywide are in such a mess. I’m starting to sense that some of this huge mess wasn’t just down to Alison Platt (although she had a huge part to play clearly) but just as much to do with the BoD’s who simply can’t do their job!
If this goes “Pete Tonge” now then it isn’t on her watch it’s on theirs! They are clearly making wrong decisions again. Meesrs Long, Creffield etc all need to wake up and smell the coffee and act like proper leaders. Take some share options for sure but introduce a new scheme after they’ve done some of the turn around and got some success under their belts, otherwise expect the disengagement of their entire staff. Poor & weak leadership from people who are clearly out of their depth. You wouldn’t want to be in one of their offices this morning, morale will surely be very low yet again and understandably so.
“We won’t do it because it’s our job or to save the jobs of hundreds of our staff, or because we are also collectively responsible for where the company is today, but give us £21M and we will have a crack at saving the firm”
Well if it doesn’t work I guess they all have job possibilities with cyber blackmail organisations.
Given the front line staff have seen their commission reduce over the last few years and no increase in basic salary.
It shows the utter contempt the board still have for estate agents.
20 million to 3 individuals while some are just on above basic wage is frankly disgusting.
LinkedIn is littered with the poor sods (front line) deluding themselves they are doing a good job and they are turning it around.
They are swimming against the tide and the board still show them zero respect.
It has always been a challenging company to work for. Today it looks like it is horrendous.
In my opinion overboarding should be illegal. This chap has multiple board positions, over seeing multiple failures. Countrywide in turmoil losing money hand over fist, and Royal Mail has just been fined millions for very shoddy practices.
Six million huh?
So if the average fee at one of their brands is 2.5k that’s 2400 completed sales to pay the part time chairman, stop the world I want to get off
No wonder the group is about to collapse.
People are getting paid for failure.
It would be surprising if Oaktree sign off an incentive plan that didn’t deliver what they want.
The targets will probably include achieving a certain level of share price within 2 years.
The directors must be confident they can achieve this – they have already written off a shedload of goodwill and impaired “assets” and will almost certainly do the same again in the 1st year, which will then set them up nicely to restart the wash cycle over again and artificially boost profits.
It will be “trebles all round” for the chosen few, with some crumbs to pacify the hoi polloi at the coalface.
Sack these Monkeys! ……both my personal view and as a Shareholder – I had money doing nothing and as Countrywide were doing nothing at just over 10p I chose not to place my money on a pavement and set fire to it, instead I thought I could have a much more entertaining laugh by purchasing Countrywide Shares ……so I did, and what a laugh this little piece of news has given me …..the fact that these clowns can apparently still keep shafting Countrywide?! despite 10p share price??
Honestly, are we in some kind of 3rd Dimension World where Clowns Control the world and human beings are just used as toilet paper!
CW – Clowns World!
These 3 Clowns need to be loaded onto a Big Pointy Rocket and fired off to Mars where they can do no damage!