Ocado investor Royal London is preparing to vote against the online supermarket’s executive pay report at its annual meeting tomorrow, branding boss Tim Steiner’s £58.7m payout “excessive”.
Steiner’s remuneration package included a £54.1m Growth Incentive Plan award, linked to the company’s share price growth between 2014 and 2019.
The scheme paid out £87.5m to Ocado executives in total.
Ashley Hamilton Claxton, head of responsible investment at Royal London Asset Management, which holds a 0.3 per cent stake in the company, said: “Ocado’s latest pay report is a classic example of how poorly designed incentive plans can lead to excessive awards for management.”
He added: “While we recognise the significant returns for shareholders which Ocado has delivered since the end of 2017, we are concerned that the Remuneration Committee did not apply any discretion, particularly as this scheme ran alongside Ocado’s regular variable pay plans.
“We have consistently voted against executive pay for a number of years at Ocado, including voting against the new value creation plan which was opposed by nearly a quarter of Ocado’s shareholders last year. Once again, we plan to vote against pay at Wednesday’s AGM.”
Shareholder advisory group ISS has recommended that investors vote against the remuneration report at tomorrow’s meeting. It has also advised shareholders to oppose the reelection of remuneration committee chair Andrew Harrison.
Chairman Lord Stuart Rose said: “Ocado recognises the sensitivities around executive pay and places great emphasis on ensuring its executive remuneration is closely tied to creating value for shareholders and our broader stakeholders.
“The scheme in question was created in 2014 and vested in full in May 2019.”
The online grocer, which was forced to close to new users last month after coronavirus caused a surge in demand, is also due to publish an update on trading tomorrow.