The Committee reviewed a paper prepared by Dunelm’s • The business performed strongly on customer and brokers setting out Dunelm’s share price performance colleague engagement scores, including the customer over the period from January 2019 to the end of June 2021, ‘How safe was your expeece?’ easure, which was compared with the performance of the FTSE 250 index and consistently 95% or above. the FTSE 350 retailers index. The following factors were • Colleagues received a pay increase during the year; considered: colleagues in a bonus scheme will receive a similar outcome • The share price used to calculate the number of shares to that of Nick and Laura, and a second ‘thank you’ payment in the award (1,189p) is close to the pre Covid-19 price in has been made to all other colleagues, of between £250 February 2020, and therefore any share price increase over and £350 (dependent on average hours worked). the year was likely to reflect management action rather than • Continued support was given to local communities and market recovery. charitable activity, as described elsewhere in this report. • Markets were volatile over the year but did not increase that • Feedback from the National Colleague Voice on Executive much. The Dunelm share price over the financial year was pay has been that colleagues are satisfied with pay awarded volatile, and varied between 1,131p and 1,561p, closing at provided that it reflects the performance of the business. 1,367p at the end of the financial year. • The Group was able to resume payment of dividends to • Dunelm’s business performed well over the year, against shareholders, with an interim dividend of 12p per share peers and our own expectations. Dunelm’s share price paid on 10 April, a recommended final dividend of 23p per broadly reflects our performance and the market’s share, and a special dividend of 65p per share. understanding of it against market expectations. The • The Board decision to repay the £14.5m claimed from the share price tended to rise after results announcements. government’s Job Retention Scheme in FY20, and the Share price falls largely reflected external factors such as fact that no claims have been made in FY21. Colleagues imposition of restrictions due to Covid-19. who were placed on furlough in FY21 received the • In February 2021, the Adderley family, our majority same payments that they would have received via the shareholder, disposed of part of its shareholding, which government scheme, funded by the Group. had a negative impact on the share price. • The Board’s decision to repay £4.0m in Covid-related grants • Vesting of 50% of the shares was deferred to September received in FY21. 2022, and shares vesting are subject to retention in • The fact that the Board has decided not to repay to the accordance with the Shareholding Guidelines, which government business rates relief made available to all retailers increases shareholder alignment. in FY20 and FY21. The Committee noted that in making this decision, the Board has carefully considered both the Having taken all of the above into account, the Committee respective interests of all of our stakeholders and a range of determined that the value of the Executives’ awards that is other factors, including the repayment of other government attributed to share price increase was more related to the support as noted above, the strong recovery of the Company’s performance than wider market trends, external business, the fact that our stores were closed to customers and/or fortuitous circumstances, and thus the bonus outcome for a third of the financial year and the competitive did not include an element of windfall gain. Therefore no imbalances arising from the boundaries between essential adjustment should be made to the outcome. and non-essential retail. Further details relating to the Board’s decisions in relation to repayment of government DISCRETION support are in the case study on page 110. The Committee carefully considered whether it should • Shares earned by Executive Directors are to be retained in exercise its discretion to adjust the overall outcome of the accordance with the Company’s Shareholding Guidelines. FY21 Share Bonus Award after applying the performance criteria described above (in addition to the discretion applied Having considered all of the above factors, the Committee in relation to the financial performance criteria as described agreed that the FY21 annual bonus outcome for each of above). In doing so it considered the following factors: Nick Wilkinson and Laura Carr was fair and reasonable in the • The financial performance of the Group has been strong, circumstances, reflected shareholder and wider stakeholder delivering record sales and profit, despite the ongoing experience, and should not be further adjusted. Covid-19 crisis which has impacted operations and the external environment throughout the financial year. • Significant progress has been made to advance the strategic objectives as set out earlier in the report, designed to accelerate future growth and advance the Company’s long- term ambitions. DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021 159 GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTSOTHER INFORMATION