Morrisons (MRW.L) shareholders have been urged to vote against a generous executive pension payout.
An advisory group has recommended investors do not pass a proposal for a 24% pension contribution rate for chief executive David Potts and chief operating officer Trevor Strain this year.
Corporate guidance recommends that executive contribution rates are aligned with the rest of the workforce which is 5% for the majority of Morrisons staff.
ISS has recommended that shareholders vote against the company’s remuneration policy at its annual meeting on 11 June, reports The Times.
Two of Morrisons’ non-executive directors quit earlier this year claiming there was an inappropriate closeness between chairman Andy Higginson and the two executives.
Last year, Potts and Strain were paid £4.2m and £3.1m respectively and it is expected that 63-year-old Potts will retire next year and be replaced by Strain.
A source told The Times it would not be appropriate to slash Potts’s pay so close to his retirement, and Strain’s pension payouts would be brought into line with the rest of the workforce over time.
The generous payouts come at a time when supermarkets have saved millions of pounds from business rate holidays during the coronavirus pandemic whilst simultaneously receiving a boost in sales.
And Morrisons is not the only big supermarket under the spotlight as Glass Lewis, another advisory group, has urged Tesco’s shareholders to vote against its pay report at next month’s AGM.
This is due to Tesco removing rival Ocado from its performance benchmark to boost board bonuses.