The Boots boss, Seb James, more than doubled his pay to £3.8m last year after the chemist chain tripled profits as pandemic restrictions eased.
In the year to 31 August, the beauty retail and pharmacy business made a pre-tax profit of £137m across its three entities that file accounts at Companies House, up from £44.5m a year before, while sales rose by just under 10% to nearly £7.8bn.
Profits were partly helped by the closure of 44 underperforming stores, according to accounts for the group’s Boots UK entity, part of a plan to close 200 outlets that would reduce its total to 2,232 by the end of the summer.
James, a friend of the former prime minister David Cameron, is understood to be the highest-paid director at Boots, taking home £1.8m in long-term bonuses on top of £1.9m in annual pay and £100,000 in pension payments during the year. That compared with a total payout of £1.5m the year before. James ran the Currys electrical goods business under its previous name, Dixons Carphone, before taking the reins at the high street chemist in 2018.
A spokesperson for Boots said: “A significant proportion of the highest-paid director’s remuneration is made up of long-term incentive plan awards and this year’s increase in renumeration largely relates to such awards, which are made in [parent company] Walgreens Boots Alliance shares that vest over a number of years and are reliant on various performance factors being met.”
Boots had a difficult time during the pandemic when the number of visitors to its high street outlets dived amid government restrictions. While the group was able to keep its stores open, as its products and services were deemed essential, its customers chose to buy online or rein in spending on items such as cosmetics, hair care or deodorant given restrictions on socialising and the closure of bars, restaurants and cafes and many high street shops.
Trade has picked up in the past 18 months, with Boots reporting an 8.7% rise in underlying sales in the three months to 30 November and 16% growth in non-pharmacy sales in the following three months.
Sales of beauty products have bounced back, while sales of cold and flu remedies were strong in the winter as the rise in socialising led to the spread of ordinary seasonal bugs.
The US pharmacy company Walgreens Boots Alliance abandoned a hoped-for £5bn sale of Britain’s biggest chemist just under a year ago, blaming global financial market conditions, which meant potential buyers were struggling to borrow money to finance a deal.
As it prepared for a potential deal, the accounts show that its Boots UK entity, which carried nearly £2bn of debts, did not pay a dividend last year, having paid out £15m the year before when it received £10m in government support.
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The cost of borrowing has soared in the past two years, and businesses have found it particularly difficult to raise debt amid concerns about consumer spending driven by the surge in the cost of essentials.
However, recent reports have suggested that the Walgreens boss, Stefano Pessina, might be considering putting Boots back on the auction block.
Last year, the Indian billionaire Mukesh Ambani’s Reliance Industries and US private equity investor Apollo Global Management made a joint £5bn bid for Boots. Interest from the owners of Asda, brothers Mohsin and Zuber Issa, never led to a formal bid, while the US firms CVC and Bain Capital also dropped a mooted approach.
