It’s not difficult to understand why shareholders might be less impressed: according to its end-of-year results in May, Dixons’ sales were down by 2% in 2010, while it has accumulated debts of £220m. And, in contrast to a lot of high street businesses, its online offering wasn’t even doing particularly well, with like-for-like growth down by 5% over the year.
More importantly to shareholders, the price of Dixons’ stock has also plummeted since Browett started his role, after leaving his post as operations director of Tesco. Even this morning, shares fell by 0.26p to 15.03p – just over a tenth of the 150p they were worth when Browett started in 2007. In fact, £100 invested in the company five years ago would be worth just £15 today. So you can understand why investors’ noses might be a touch out of joint.
Still, it raises an interesting question: how much of Dixons’ dire performance is really down to Browett? Dixons was already in a pretty ropey state when he took over his role. And given that he started in December 2007 – just months before the recession hit – you can hardly place the blame entirely on his shoulders. Particularly when you consider that retailers of big-ticket items (like, say, stereos and TVs) have been among those hit hardest by low consumer confidence. In fact, Browett has arguably spent much of the last five years fighting a rearguard action.
For its part, Dixons defended its decision by pointing out that Browett and Cadbury’s rewards weren’t based on the company’s performance, but on their ‘meeting personal objectives’ (whatever that means). And it’s telling that his total pay was significantly less than the £1.57m he got in the year before. So there’s clearly a performance element in there…