Almost 30% of Ocado shareholders voted against the company’s remuneration policy that would see its chief executive Tim Steiner receive up to £100m over the next five years.
In an update of the results following its AGM on Wednesday (4 May), Ocado revealed that the policy received 184,973,188 votes opposing its implementation – equivalent to 29% of shareholders. It also revealed that a similar number also voted against its ‘value creation plan’, a bonus scheme that awards 2.75% of any shareholder value over a certain hurdle to executive directors and other senior managers.
The scheme, which has been extended until 2027, will see Steiner earn up to £20m a year if certain share targets are met. It comes after the company missed a share price target that would have triggered a bonus payment for Steiner in March.
Ocado said: “As part of developing the remuneration Policy for the coming three years, the remuneration committee chairman undertook an extensive programme of engagement with our largest shareholders and representative bodies to seek input on the proposed changes.
“Many of our largest shareholders understood the strategic rationale for continuing to operate a non-standard, leveraged long-term incentive plan at Ocado and indicated their support for our proposals to extend the scheme beyond its original five-year term.”
It continued: “In particular, shareholders recognised the challenges associated with recruiting internationally and competing for talent within the technology sector. 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.
“…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.”