Shareholders voiced displeasure at the bumper pay packet of Sainsbury’s (SBRY.L) CEO Mike Coupe on Thursday, with a significant minority voting to reject his proposed pay rise.
Investors were asked to approve proposals for executive pay at Sainsbury’s AGM on Thursday. The proposals included a £251,000 pay rise for Coupe, which would see his total take home rise to £3.9 million.
The rise comes despite Sainsbury’s share price falling to a 30-year low and pre-tax profits collapsing by 42% after the supermarket’s failed attempt to merge with rival Asda.
9.5% of the votes cast at Thursday’s AGM called for the executive remuneration plan to be rejected. While the result means Coupe will still get his pay rise, it represents a significant sign of displeasure among investors.
Two shareholder advisory groups, Pirc and Glass Lewis, advised Sainsbury’s investors to reject the pay proposals ahead of the AGM. Pirc said Coupe’s pay was “considered excessive” and did not match shareholder returns, according to the Guardian.
Sainsbury’s has struggled since the UK’s competition regulator blocked its proposed merger with Asda in April. When the deal was first announced he was caught on camera singing “We’re in the money,” which added to the embarrassment of the deal’s collapse.
Coupe has attacked the competition watchdog and blamed the regulator for the failure of the £12 million deal. However, he has faced growing calls to resign over the failed merger.
First quarter results released this week show Coupe is struggling to turn around performance. Sainsbury’s sales missed expectations in the first three months of the year, falling by 1.6% against forecasts of 1.5%.
Bernstein analyst Bruno Monteyne said in a note on Thursday that the market sees Sainsbury’s as “a slowly unfolding car crash,” due to “2 years of sales growth behind peers, a bank perceived as a basket case, large exposure to [general merchandise] & Clothing in a weak consumer environment, too high level of exceptionals, and an imminent margin reset.”
Coupe said in a statement published alongside this week’s first quarter results that Sainsbury’s “continue[s] to adapt our business to changing shopping habits and made good progress in a challenging market.”
Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.