Myer’s (ASX:MYR) board will shrink from seven to five after it opted not to replace two retirees.

Julie Ann Morrison and Lyndsey Cattermole will stand down at the company’s AGM and won’t be replaced.

The remaining directors also accepted pay cuts for at least the next two years. Chairman Garry Hounsell’s pay will drop from $300,000 to $250,000 while non-executive director pay will fall from $120,000 to $100,000.

The company says this is the third reduction since FY18 and reflected the business’ size and the current operating environment.

COVID-19 has been tough for the company. Its full year earnings fell 42 per cent to $93.5 million and it made a statutory net loss after tax of $172.4 million.

Myer was forced to close its physical stores for six weeks at the peak of restrictions. Its metropolitan Melbourne stores closed the shutters a second time with Victoria’s second wave.

After sitting at $3.61 a decade ago, the stock sits at only 24 cents today.

Myer (ASX:MYR) share price graph


Good enough for Myer investor Geoff Wilson?

The proposal came only a day after Myer investor Geoff Wilson, the boss of Wilson Asset Management, made a proposal to Myer’s Hounsell.

Wilson suggested the pay cuts and the aggregate fee pool needed to be permanent.

Additionally, he also asked for clarification on whether suppliers had withdrawn from commercial agreements.

This followed fellow substantial holder Solomon Lew declaring that he’d reduced his exposure to Myer. Wilson said Lew was personally aware that certain suppliers were hesitant to do business with Myer.

Hounsell publicly replied to Wilson this morning. While Hounsell would not comment on specific arrangements he said broad support remained notwithstanding some adjustments to its range were necessary.

“During COVID-19, we’ve seen significant increases in customer demand for some categories and brands and decreases in others and Myer must adjusts its range accordingly,” he said.

“Myer confirms that during this time of unprecedented uncertainty across retail as well as the broader economy, Myer has maintained the support of its merchandise supplier base and continued to pay its merchandise suppliers either according to existing contract terms or better.”

Wilson also asked if the company intended to eventually pay dividends again. He noted Myer had enough franking credits to pay $118 million in dividends if the company had the required profits.

Hounsell said this would happen when it was “prudent” to do so.