Hostelworld investors revolt over executive pay

More than a quarter of Hostelworld investors have rebelled against the pay deal for bosses at the pandemic-hit firm.

The global hostel operator said that 29% of shareholder votes were cast against an amendment to its remuneration policy after generous incentive schemes were criticised.

Shareholder advisory group ISS had recommended that investors vote against the deal due to the incentives and share awards for chief executive Gary Morrison and chief financial officer Caroline Sherry.

The deal, which was ultimately passed after receiving more than the 50% required, were designed to compensate them amid pay reductions following the impact of the pandemic and travel restrictions on operations.

Mr Morrison and Ms Sherry will receive one-off restricted share awards after their annual cash bonus was withheld for the year.

The one-off payment is valued at twice their target bonus, or 112% of their salary.

Mr Morrison will earn a salary of 498,000 euros (£432,000) after it was frozen for the year, while Ms Sherry joined the company in December on a basic salary of 275,000 euros (£239,000).

At Monday’s annual general meeting, around a quarter of shareholders also revolted against a resolution to authorise the company to make political donations.

Following the vote, Hostelworld said: “As stated in the notice of AGM, it is not the Company’s intention to make donations to political parties, or to make other political donations within the normal meaning of that expression, and the directors have no intention of changing that policy.

“The company intends to consult with the relevant shareholders to better understand their concerns on this issue and the reasons behind this result, and will provide an update within six months as required by the code.”

Hostelworld also told shareholders that it saw weak booking demand in the first three months of 2021 as travel restrictions continue to impact sales.