Ocado rocked by fat cat pay backlash: 30 per cent of investors shun £58m deal for online grocer’s boss Tim Steiner
Shareholders gave Ocado a bloody nose in a revolt against boardroom excess after chief executive Tim Steiner landed a £59million payday.
Just hours after the online grocer revealed sales have jumped more than 40 per cent in the last five weeks, it emerged that 29.7 per cent of investors had voted against top pay at the company.
The rebellion, which took the shine off Ocado’s bumper sales figures during the lockdown, followed the recommendation of three shareholder advisory groups who described rewards as ‘excessive’.
Ocado chief executive Tim Steiner landed a £59m payday last year and has a £526m stake in the online grocer
Last year £88million was paid in bonuses to executives as part of a long-term share scheme, and Steiner is in line for up to £100million over five years if the share price continues to rocket.
A vote over 20 per cent is considered a revolt under corporate governance rules, and requires the company to consult investors.
Shareholders were also urged to oppose the re-election of Andrew Harrison, who heads the remuneration committee, and chairman Lord Rose, on claims he is not independent.
Rose’s reappointment was waved through with just 4.1 per cent voting against. But a fifth of shareholders voted against Harrison’s reappointment at the annual general meeting, held behind closed doors yesterday.
The FTSE 100 company, which has enjoyed a monumental rise on the stock market, said its massive pay packets were fair rewards for Ocado’s ‘exceptional’ share price performance.
A trading update revealed sales have jumped 40.3 per cent in the last five weeks amid booming demand for online food deliveries during the lockdown.
That followed 10.3 per cent growth in the first quarter.
Ocado has ramped up deliveries from its warehouses to meet demand, but it was unable to make the rapid increases that rivals such as Tesco have made, as it is limited by the number of robots it has to pick food for orders.
New staff were brought in to fill in for those off sick or self-isolating, while those on the frontline have received a 10 per cent bonus.
It has also reduced the number of items it is selling. Suspending the delivery of mineral water has allowed Ocado to deliver to 6,000 more households per week.
In total it has delivered more than 50m items to UK homes since the middle of March after its website was hit with so much demand it had to shut for four days. Customers are still doing big shops because people are eating at home, or buying for vulnerable neighbours or relatives.
Wine, beer and chocolate are selling well as shoppers look ‘to reward themselves with little treats’, the firm said.
It withdrew financial guidance for the rest of the year, citing the uncertain route out of lockdown and how it will affect shoppers.
Finance chief Duncan Tatton-Brown said: ‘We’re not yet sure of when some of the restrictions will change, when the behaviour of customers will return to normal and what the economic impact will be. There’s lots of uncertainty.’
Peel Hunt analysts said: ‘A very positive surprise performance from Ocado highlights that online food delivery is a vital public service and has grown in popularity over the past few weeks, and will likely see a permanent step-up post-Covid-19.’ Shares rose 5.6 per cent, or 93.5p, to 1772.5p.