Ocado plan to extend incentive scheme opposed by 29% of AGM votes

By James Davey

LONDON (Reuters) - Some 29% of votes cast at Ocado's annual shareholder meeting on Wednesday opposed the online supermarket and technology group's plan to extend a management incentive scheme beyond its original five-year term.

The same number of votes cast at the AGM also opposed Ocado's pay policy. In 2020, almost 30% of votes cast had also opposed its 2019 pay report, which included a 58.7 million pound ($73.3 million) package for co-founder and Chief Executive Tim Steiner.

Some shareholders and investor advisory groups had highlighted ahead of the AGM what they regarded as potentially excessive awards for Ocado's executives of up to 20 million pounds a year from the scheme.

Investors have become more vocal in their opposition to boardroom pay deals they deem excessive amid society's broader struggles in the COVID-19 pandemic and a cost of living crisis.

Ocado, which has a market capitalisation of about 7 billion pounds, noted the opposition, but said it had consulted its major investors extensively ahead of developing its remuneration policy for the coming three years.

"Many of our largest shareholders understood the strategic rationale for continuing to operate a non-standard, leveraged long-term incentive plan at Ocado and indicated their support for our proposals to extend the scheme beyond its original five-year term," it said.

It said investors recognised the challenges associated with recruiting internationally and competing for talent within the technology sector, adding that it continued to believe the changes offered the best way to drive growth "whilst also rewarding short-term operational and strategic decisions".

Ocado's shares soared during the coronavirus crisis as a result of higher demand for grocery deliveries, but they have lost more than half their value over the last year as shoppers began to revert to pre-pandemic behaviour.

($1 = 0.8012 pounds)

(Reporting by James Davey; Editing by Kylie MacLellan and Alexander Smith)