Fraud-hit WANdisco demands former chiefs repay six-figure bonuses
Two former executives of WANdisco, the data software group whose value has collapsed after the exposure of an apparent fraud, are facing demands from the company to repay almost £650,000 in bonuses awarded last year.
Sky News has learnt that WANdisco’s board has written to David Richards, the company’s co-founder and former CEO, and the ex-finance chief Erik Miller to request that they hand back a total of $832,000 (£647,000).
The annual bonuses, which were disclosed in WANdisco’s recently published annual report, took the respective pay packages of Mr Richards and Mr Miller to $1.14m (£886,100) and $551,000 (£428,300) respectively.
City sources said the bonus awards had sparked anger among shareholders who have seen the value of their holdings plunge since the discovery of a sales and accounting scam in March.
WANdisco’s shares were immediately suspended and the board parachuted in Stephen Kelly, the respected former chief executive of Sage Group, as its interim boss.
Earlier this month, Mr Kelly and his boardroom colleagues secured $30m (£23.3m) in new funding to rescue the company, with the interim chief’s appointment made permanent last week.
In response to an enquiry from Sky News, a WANdisco spokesman said: “In line with shareholder sentiment, and as simply the right thing to do, the Board of WANdisco confirms that it has written to former executives of the company requesting that bonuses paid for [the last financial year] are returned.
“It is clear that the bonuses paid are significantly at odds with the realities the company has faced.”
It was unclear on Monday whether WANdisco had any legal powers to force Mr Richards and Mr Miller to repay the money.
However, the pressure on Mr Richards to do so is likely to be overwhelming.
The company’s annual report revealed in a section on related party transactions that during the course of last year, WANdisco agreed to pay more than $360,000 (£280,000) to sponsor Sheffield Wednesday FC next season.
The agreement was struck on behalf of EyUp Skills Limited, a company owned by Mr Richards and his wife, Jane.
A further identical sum is payable “contingent on certain post-year end outcomes”, the annual report said.
The suspension of WANdisco’s shares came just days after Sky News had revealed that Mr Richards was working with bankers on plans to list its shares in the US.
Mr Richards, then the company’s chairman, president, chief executive and co-founder, had first talked publicly about the possibility of its shares trading on an American exchange in 2017.
Based in Sheffield and Silicon Valley, WANdisco describes itself as a data activation platform which uses cloud-based analytics technology to aid corporate clients’ decision-making.
In early March, the company had a market capitalisation of more than £890m and had seen its shares rise more than fivefold over the last year.
Since the resumption of trading in its stock, its value has fallen sharply.
On Monday, the shares were trading at around 97.7p, giving WANdisco a market capitalisation of about £103m.
Neither Mr Richards nor Mr Miller could be reached for comment.