Irenic Opposes The Restaurant Group’s Remuneration Policy

Irenic Capital Management LP (together with its affiliates, “Irenic” or “we”), a substantial shareholder of The Restaurant Group plc (LON: RTN) (“The Restaurant Group” or the “Company”), today issued the following statement in response to inquiries:

“Irenic intends to vote against the Remuneration Policy. We have already communicated this privately to Non-Executive Chairman Ken Hanna and Chief Executive Officer Andy Hornby. In place of the current compensation scheme, we have suggested the Board adopt a new plan that more closely links compensation to shareholder returns.

We believe Mr. Hornby is capable of unlocking the substantial value that exists at The Restaurant Group. But unfortunately, the current remuneration plan provides little incentive to do so. In fact, it does the opposite. Under the current remuneration plan, the only direct financial incentive for Mr. Hornby is to increase overall profits at the enterprise – irrespective of the capital employed to do so. This encourages ill-advised acquisitions (Barburrito) and provides a disincentive to make the hard but necessary decision to sell non-core assets – and use the proceeds to de-lever.

Ultimately, The Restaurant Group should own just Wagamama and focus its efforts on growing that business. We have urged Mr. Hanna and the Board to design a Remuneration Policy that encourages Mr. Hornby to get to this end-state as quickly as possible. Should the Remuneration Committee adopt such a policy in the future, we would support it.

The path forward at The Restaurant Group should be clear. Dispose non-core assets, de-lever, and grow Wagamama – a brand that has excellent unit economics and a substantial global runway. Performance of The Restaurant Group’s non-core assets has rebounded from the depths of COVID-19 and financing markets are open. There is no reason for further delay in an asset sale program. It is time to get on with it.”

About Irenic

Irenic Capital Management LP is an investment management firm founded by Adam Katz and Andy Dodge. Based in New York City, Irenic works collaboratively with publicly traded companies to ensure operating activities, capital deployment and management incentives are all aligned to create value for the company and its owners. For more information about Irenic, please visit www.irenicmgmt.com.

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