Grocery tech giant Ocado has seen off an investor rebellion over its bosses’ pay packet today despite two of the world’s biggest shareholders urging investors to vote against the plans.
The FTSE 100 firm had faced pushback from shareholders over an incentive scheme which could net boss Tim Steiner up to £20m a year over the next five years, or a maximum of £100m over the next 5 years.
But bosses were left with just a bloody nose from investors as 29 per cent rejected the plans at the firm’s annual general meeting, while over 70 per cent of votes were cast in favour.
Ocado said today it had “noted” concerns over the pay boost and value creation plan at the meeting today, but said shareholders recognised competitive pay was key to attracting top talent to the firm.
“In particular, shareholders recognised the challenges associated with recruiting internationally and competing for talent within the technology sector,” the firm said in a statement.
“Furthermore, the Committee notes that it continues to be Ocado’s remuneration policy to aim to set fixed pay towards the lower quartile of the market and offer substantial comparative reward (via our incentives) for transformational performance.”
It comes after days of speculation over whether the investors would rebel over the plans, with asset Management giant Royal London among the top investors to voice its opposition and pledge to vote against the proposal today.
“This is another example of how poorly designed incentive plans can lead to excessive awards for management,” said Sophie Johnson, RLAM’s corporate governance manager.
Glass Lewis and Institutional Shareholder Services, the world’s two top proxy advisers, similarly urged shareholders to vote against the pay boost for Steiner.
ISS warned this week that proposals laid out by Ocado would boost the award pool and offer “maximum individual allocation”, as well as extend the performance period when targets may be retested.
“These exacerbate previously highlighted concerns with the high quantum,” the firm said in the report to shareholders.
Glass Lewis meanwhile said it was concerned about the room “for excessive payouts” in the plans.