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Ocado is on course for another showdown with investors at its annual meeting this month over a new pay scheme that includes a bonus share award of up to £15mn for boss Tim Steiner.
The FTSE 100 company, which sells its robotic warehouses to other grocers worldwide and co-owns the eponymous online supermarket with Marks and Spencer, is seeking to change its pay plan as the previous scheme comes to an end this year.
Co-founder and chief executive Steiner is in line for a share award worth about £14.8mn — or as much as 1,800 per cent of his £824,570 base salary — from 2027 if Ocado’s share price reaches £29.69 in three years’ time and it improves its cash flow, among other metrics. Ocado shares currently trade at less than £4.
Two influential advisory groups have now urged shareholders to vote against the company’s proposed remuneration policy and share awards, raising concerns that the changes could lead to “excessive pay” and “[award] materially above market norms”.
Glass Lewis said it was “sceptical about the ‘enhanced multiplier’” related to Steiner’s incentive scheme for 2024, “ . . . an award level in excess of peers”. Meanwhile, Institutional Shareholder Services cited “material concerns” over its proposed remuneration structure.
Ocado’s board said it was mindful of Steiner’s “unique position as a founder and his long-term focus and strategic vision” in its most recent annual report as it detailed the changes.
Steiner, who was paid almost £2mn last year, co-founded the company with two other Goldman Sachs executives in 2000. Some analysts consider it the future of online shopping, while others view it as a cash-guzzling venture with elusive profits.
The stock has tumbled since hitting a record high during the pandemic-driven boom in online spending — with shares down almost a quarter in the past year.
Ocado’s annual meeting will be held on April 29.
Last year almost a third of votes cast at Ocado’s AGM went against bumper bonuses and pay for the company’s bosses and it has repeatedly attracted the ire of advisory groups over past pay schemes.
Ocado paid Steiner £59mn in 2019 despite suffering a £215mn loss, in one of the largest annual payouts for a FTSE 100 chief executive.
In its report, Glass Lewis acknowledged the “extensive consultation process” with shareholders regarding pay that was undertaken by the board in 2023.
Separately, this week Ocado’s chair Rick Haythornthwaite said he would step down next year owing to his “increasing commitment” in the same role at NatWest. The shares were down almost 8 per cent to 388p on Friday.
Ocado declined to comment.
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