Ocado is facing a potential shareholder revolt over executive pay after an influential proxy adviser has encouraged investors to vote against the group’s new bonus scheme that could see CEO Tim Steiner receive as much as £14.8m.
Institutional Shareholder Services (ISS) has recommended that shareholders vote against the online grocer’s new remuneration policy and performance share plan at next month’s annual meeting due to “material concerns” over the sum of money executives could receive, The Times reported.
ISS said the possible amount on offer was “materially above market norms” and “not in line with UK market standards and investor expectations”.
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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”.
The online supermarket’s share price rocketed during the Covid-19 pandemic to more than £28 when shoppers flocked online to buy groceries.
However, following a recent rift with M&S over its joint venture and as shoppers return to stores for their weekly shop, Ocado’s share price has plummeted to 468p or £4.68 as of Friday afternoon (22 March).
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