Yahoo Finance Ocado hit by backlash over founder’s £14.8m pay deal as fifth of investors revolt
The chairman of Ocado has insisted that plans to pay its founder Tim Steiner a bonus worth up to £14.8m are fair, despite a shareholder backlash against the proposals.
More than 19pc of votes at Monday’s annual shareholder meeting went against the pay scheme, which allows Mr Steiner to receive a bonus worth up to 1,800pc of his base salary if certain targets are met.
His base salary stands at £824,570. Ocado has said the bonus scheme was important to reinforce Mr Steiner’s “longer-term focus and strategic vision”.
Rick Haythornthwaite, Ocado’s chairman, launched a defence of Mr Steiner’s pay package at the investor meeting, following weeks of criticism by influential shareholder advisers Glass Lewis and campaign group ShareAction.
Glass Lewis had questioned whether there was a need for an “enhanced incentivisation tool” at Ocado, while ShareAction criticised the gulf between Mr Steiner’s pay and what frontline staff received.
Mr Haythornthwaite argued that Ocado’s staff owed their jobs to Mr Steiner, who co-founded the business in 2000. He was therefore “somewhat different” when it came to chief executive pay, as none of the people employed by Ocado “would have a job without the performance of this individual”.
Ocado, which is worth £2.9bn, employs over 20,000 people. The company operates an online grocery store as a joint venture with Marks & Spencer, but now focuses mostly on providing logistics and warehouse technology to other retailers.
Responding to the concerns over worker pay, Mr Haythornthwaite said Ocado had “decided not to seek accreditation by the Real Living Wage to ensure that we’re able to continue to make the right pay decisions in the right locations to attract and retain talent”.
Questions over Mr Steiner’s remuneration are part of a broader argument in the City about how much to pay executives. Bosses have been warning that a reluctance to pay executives US-style packages is holding back the London stock market.
Other major London-listed companies have been hit by backlashes, with around 35pc of voting shareholders at AstraZeneca rejecting boss Pascal Soriot’s £19m pay package earlier this month.
Mr Soriot last week claimed his deal would help save Britain’s life sciences industry, saying it was designed to make the company “competitive and attractive for my successor.”.
Ocado on Monday also faced criticism over its attempts to build a delivery hub next to a primary school in north London. Several shareholders spoke out at the meeting, claiming the scheme was “frankly crazy” and posed a threat to children at the school.
The depot plans have previously been rejected by Islington council and the High Court. They have now progressed to the planning inspectorate. Mr Haythornthwaite vowed to meet with the campaigners to discuss their concerns.
