30% of Ocado shareholders revolt over CEO bonus plan
Ocado shareholders have protested against high pay for directors at the online grocery specialist, with almost 30% voting against a plan to pay the ceo, Tim Steiner, up to £100m over the next five years.
Just under 30% of Ocado shareholders voted against its directors’ policy pay at the annual general meeting on Wednesday. A similar proportion voted against a three-year extension of Ocado’s “value creation plan”, under which Steiner can earn up to £20m a year and other executives up to £5m each.
The extension of the scheme to 2027 came after the company missed a share price target that would have triggered a £20m bonus for Steiner in March. Ocado’s share price has fallen by more than two-thirds to about 890p from a peak in January 2021, as the surge in online grocery shopping during the pandemic has rapidly unwound.
The scheme was announced in 2019 and was originally meant to run for five years until 2024. A significant proportion of the group’s shareholders tried to block the deal in 2020, when 30% voted against it, while about 13% voted against last year. The deal replaced an earlier high-paying plan that also proved controversial.
The latest pay proposals had been criticised by the investor advisers Glass Lewis and Institutional Shareholder Services. The proposal has prompted complaints from Ocado’s shareholder Royal London Asset Management (RLAM).
RLAM said it had serious concerns about the value creation plan, adding that it was an “example of how poorly designed incentive plans” could “lead to excessive awards for management”.
Ocado said after the AGM: “The board understands the concerns of some shareholders around the non-standard nature of the VCP, which was reflected in the votes on Resolutions 2 and 20. However, it continues to believe that the changes proposed and approved offer the best way to drive exceptional and sustainable growth, whilst also rewarding short-term operational and strategic decisions.
“The Remuneration Committee will keep the operation of the VCP and all other aspects of executive remuneration under review and will continue to engage with shareholders to understand their perspectives and concerns.”
