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Ocado reportedly could see a shareholder revolt over executive pay after a proxy advisor recommended investors vote against the retailer’s new bonus scheme, which could mean CEO Tim Steiner receives up to £14.8m, The Times has reported.
As a result, the Institutional Shareholder Services (ISS) has recommended that shareholders vote against Ocado’s new remuneration policy and performance share plan at its AGM next month.
It is understood that the vote against the policy will be due to “material concerns” over the sum of money executives could receive.
According to the ISS, the possible amount on offer was “materially above market norms and not in line with UK market standards and investor expectations”.
In a new report to clients, the firm identified Ocado’s remuneration as a “high concern” that had been “exacerbated by the shareholder experience, with no dividend and a general decline in the company’s share price over the past few years”.
The group wants to set up an incentive scheme that could pay an award to Steiner worth as much as 1,800% of his £824,570 base salary if Ocado’s share price reaches £29.69 in three years’ time and if other performance targets are met.
Steiner would also be able to receive an award worth 600% of his base salary, or almost £5m, even if targets for total shareholder returns and other performance measures are met but the share price goal is missed.
Ocado had proposed the near £15m award in its new remuneration policy, in which it said it was mindful of Steiner’s “unique position” as a founder of the company and his “longer-term focus and strategic vision”.
During the pandemic, Ocado’s share price jumped to more than £28. However, following a row with M&S over its joint venture, the retailer’s share price dropped to £4.68 as of last week (22 March).
