Britain’s biggest wine retailer is to increase pay for its store managers in an attempt to prevent one in four of them leaving the business each year.
Majestic Wine is introducing new share incentive plans and overhauling cash bonuses for its 213 store managers, who typically earn a £30,000 salary – up from £28,000 in November – plus an annual bonus.
A cap limiting bonuses to £1,000 was scrapped in November – a first step to reduce the high staff turnover.
Majestic is introducing a new long-term incentive plan for the top 25% of staff, from store managers upwards. Shares will vest over three years, when employees acquire ownership subject to company performance.
The plan will pay out if the firm performs well compared with 25 listed specialty retailers. There will be a separate share incentive plan for other staff. Majestic employs about 1,500 people.
The retailer said it had consulted its biggest shareholders, representing 58% of the group, on both share schemes.
Majestic has also overhauled its cash bonus scheme for all employees, standardising bonus potential and measurement across the group. Staff will be measured by the same criteria, from the chief executive to store managers and graduates. Half of executive directors’ bonuses will be deferred in line with best practice.
The chief executive, Rowan Gormley, who took over after Majestic bought his online Naked Wines business for £70m in April 2015, has scaled back the company’s expansion plans and appointed a new senior management team as part of a three-year turnaround plan.
Majestic plans to open 17 new stores , rather than the previously targeted 100, and hire more staff to improve customer service.
Pre-tax profits at the company halved to £4.3m in the first six months of its financial year. Majestic has been squeezed by fierce discounting by supermarkets, which often use wine promotions to attract customers.
