Investors told to reject Sainsbury's incentive plan at the annual general meeting next week

 
Helen Cahill
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Sainsbury's annual general meeting is on Wednesday (Source: Getty)

A shareholder advisory group has told its members to oppose Sainsbury's incentive plan at the retailer's annual general meeting (AGM) next week.

In a report for investors, Pensions & Investment Research Consultants (PIRC) said of Sainsbury's long term incentive plan: "The maximum potential award under the proposed plan is 250 per cent of salary, which is considered excessive, especially when combined with the annual bonus."

The consultants also recommended investors abstain from a vote on the retailer's remuneration report.

In its report, PIRC said: "The ratio of CEO pay compared to average employee pay is considered excessive at 120:1."

A Sainsbury’s spokesperson said: “We consult with shareholders on a regular basis and are confident that our remuneration policy is appropriately set and encourages long-term shareholder value creation.”

Phil Dorrell, director of retail consultancy Retail Remedy, said he didn't think shareholders would oppose the motion.

Dorrell said:

They’ll see that, surprisingly, the board at Sainsbury's for the last two years are probably the board that have made the biggest changes and the most dynamic changes to get their business online.

Sainsbury's has done quite well, they should be rewarded.

Sainsbury's has been approached for comment.

The advice from PIRC comes just under a month after the group called for investors to reject WPP chief Martin Sorrell's pay package.

ShareSoc also said Sorrell's pay was excessive, recommending its members to reject the remuneration report in May, but WPP later confirmed Sorrell would take home a share package worth £62.78m.

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