High street stalwart WH Smith is set to reclaim approximately £1.5 million in overpaid bonuses from its former top executives, following a significant accounting scandal at its North American division.
The Accounting Blunder and FCA Probe
The travel retail specialist confirmed last week that it is under investigation by the UK's Financial Conduct Authority (FCA). The probe was launched after the company admitted to overstating profits in its North American business by as much as £50 million. The errors were attributed to serious issues within its audit process.
The situation led to the resignation of Carl Cowling as WH Smith's chief executive last month, after a report by Deloitte confirmed the scale of the accounting problems. The company's annual report, published on Wednesday 24 December 2025, detailed the financial repercussions for the former leadership.
Clawing Back the Cash and Shares
WH Smith has recalculated the annual bonus payments for both former CEO Carl Cowling and ex-finance chief Robert Moorhead for the 2023 and 2024 financial years. It has also adjusted the payouts from a long-term share bonus scheme dating from 2021.
The firm stated it overpaid Mr Cowling by £516,000 in cash and 60,182 deferred shares, valued at approximately £374,933 based on recent share prices. Mr Moorhead was overpaid by £372,000 in cash and shares worth around £272,493. The company is now actively seeking to recover these sums from the former bosses.
As a further consequence, Mr Cowling received no annual or long-term bonus for the past financial year. His total remuneration package consequently plummeted to £724,000 for the year to August 2025, down sharply from £2.71 million for the same period a year earlier.
Remediation and a New Strategic Focus
In response to the crisis, WH Smith has initiated a comprehensive remediation plan aimed at strengthening governance, ensuring consistent processes across the group, and driving cultural change through enhanced training and monitoring. The board is currently searching for a permanent group chief executive to lead the recovery.
The scandal comes as WH Smith operates as a purely travel-focused retailer. The company sold its chain of roughly 480 high street shops to Modella Capital, the owner of Hobbycraft, in June. As part of that deal, the WH Smith name is vanishing from British town centres, replaced by the brand TGJones.
The slimmed-down business, which now concentrates on its 1,300 travel location shops in airports and train stations globally, reported a pre-tax profit of £108 million for the year to the end of August, excluding one-off costs.
