WANdisco paid £646,000 in bonuses to senior bosses despite £24.5m loss before scandal
The Sheffield and California-based data migration specialist published an annual report this week which revealed in 2022, chief executive and chair David Richards was paid a $588,000 bonus on top of his $514,000 salary, while chief financial officer Erik Miller got a $244,000 bonus in addition to a salary of $269,000.
The report stated: “The Bonus Plan is based on the achievement of corporate financial performance measures, including revenue and overheads targets.”
Mr Richards and WANdisco did not wish to comment further.
The bonuses came despite the company recording a $31.6m loss for 2022, following on from a $29.5m loss in 2021.
In March this year, shares in the company were suspended after it revealed that it may have mis-stated its expected revenues for 2022, saying it could be as low as $9m compared with a previously stated $24m.
The issue relating to purchase orders represented by an unnamed employee had been uncovered following investigations by Mr Richards and Mr Miller.
Mr Richards and Mr Miller subsequently left the leadership team, while an independent investigation found recognised revenue of $14.9m and sales bookings of $115m were “false” and should have been $9.7m and $11.4m respectively. The report found an unnamed single “senior sales employee” was responsible.
The Financial Conduct Authority is also conducting its own investigation into what happened.
The company’s 177-strong workforce has been reduced by 30 per cent in light of the scandal.
In June, shareholders backed plans for a $30m equity fundraise which was completed earlier this month.
Stephen Kelly, the interim chief executive who is due to take the post permanently, said in the annual report: “Joining the Group after the conclusion of 2022 means there is little I can say about 2022. I am a shareholder in WANdisco so I share many of the same sentiments, surprise and disappointments as other shareholders.”
He added: "The market opportunity for WANdisco is huge. Put very simply the massive explosion of data from the growth in digitalisation and greater use of technology in every aspect of our lives has led to a need to transfer large amounts of data between physical locations and from physical locations to the cloud providers.
"In the short time I have been with the Group I have been asked whether our technology offering is real and why we are not able to sell more effectively, questioning the product market fit, the use cases and the demand for our offering.
“Not only is our technology real but it is differentiated.
“My priorities are to target run-rate cash flow breakeven sometime during the latter half of FY24 followed by EBITDA breakeven and ultimately to move towards profitability.”
The report said of remuneration plans for this year: “In the light of the circumstances of the business it is unlikely that bonuses will be paid for 2023 unless they relate to existing contractual entitlements.”