WH Smith tries to recover bonuses from ex-bosses as watchdog investigates accounting error | WH Smith
WH Smith will seek to claw back bonuses of up to £7m from former executives after Britain’s financial watchdog said it had launched a formal investigation into a devastating accounting error linked to its US business.
Almost £600 million of the paperclip retailer’s stock market value was wiped off the books overnight in August after it detected errors at its North American arm regarding supplier revenue accounting and stock loss provision going back to 2023.
Last month, chief executive Carl Cowling resigned following the scandal.
On Friday the company said it would “implement malius and clawback to recover overpaid bonuses” from Cowling and former finance director Robert Moorhead following the restatement of profits for the 2023 and 2024 financial years.
Cowling and Moorhead, who left last year, together received just over £7 million in bonuses and long-term share awards in those years.
Cowling received £4 million in bonuses and long-term share incentives during the period, while Moorhead earned just under £3 million.
It’s unclear how much of those bonuses the company will try to claw back.
It confirmed that the UK Financial Conduct Authority had launched a formal investigation into the company’s compliance with UK listing, disclosure and transparency rules, after it was revealed it had begun investigating last month.
The retailer’s interim chief executive, Andrew Harrison, said the company had now put in place a “clear recovery plan” to “strengthen governance and controls to protect value and restore trust”, supported by new systems.
The group is also simplifying its North American division by exiting the nonprofit fashion and specialty stores it operates in resorts under brands such as Misura and Marshall Rousso, he said. It is also reviewing its North American InMotion technology retail portfolio.
“It has been a difficult year-end for the group. The board and I are acutely aware that we have much to do to rebuild confidence in WH Smith and deliver stronger returns as we move forward,” Harrison said.
The comments came after WH Smith announced pre-tax profits for the year to August 2025 were just £16 million following one-off costs of £92 million, compared to £73 million the previous year. Sales rose 5% to £1.5bn.
The newspaper, books and stationery chain cut its financial forecasts in August and launched an independent review led by Deloitte after discovering the accounting error.
The announcement comes just months after the chain sold its high street business, which was rebranded as TGJones by new owners. WH Smith had identified North America as a growth opportunity in its new focus on branches in airports and train stations.
A Deloitte review found the division’s profits were overstated by £50 million.
The FCA confirmed on Friday that it had launched an investigation into WH Smith.
