Ocado investors rebel against executive pay
About 25% of shareholders voting opposed remuneration policy and report
Ocado suffered a shareholder rebellion over directors’ remuneration at its annual meeting, and pledged more engagement with investors over future incentive plans.
Around a quarter of shareholders voting opposed the remuneration policy and report, while a similar proportion did not support the Ocado “value creation plan”, a long-term incentive scheme that could see co-founder and chief executive Tim Steiner collect £100m if the company’s share price triples over the next five years.
Ocado’s shares were stellar performers last year on the back of a series of deals to supply its fulfilment technology to retailers around the world. By far the most significant was an agreement with US grocer Kroger to build 20 such centres in the US — news that triggered share price gains that helped propel the company into the FTSE 100.
Its market value is now £9.6bn, twice that of Marks & Spencer — the company with which it recently agreed to form a food retail joint venture.
Andrew Harrison, the former Carphone Warehouse chief executive who now chairs Ocado’s remuneration committee, said the board “recognises that some shareholders voted against our remuneration proposals” and that the final proposals reflected shareholder feedback.
“As a result of this consultation exercise, changes were made to the operation of the remuneration proposals in line with suggestions made by shareholders,” he said.
He also said: “We will continue to engage with shareholders on remuneration and governance matters and are committed to consulting on the formation of the future remuneration policies.
Almost 23 per cent of shareholders voting also opposed a share matching award for Ocado’s chairman, retail grandee Stuart Rose. Mr Harrison said that the committee believed that the restrictions on the sale of these shares “provide sufficient alignment of interests between the company, its shareholders and the chairman.”
Mr Harrison’s own re-election was opposed by 17 per cent of shareholders.