30 April 2024 , 07:45
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The boss of Ocado has had a potential bonus deal, worth almost £15million, approved despite opposition.
The online retail conglomerate gained enough majority support to sanction chief executive Tim Steiner's bonus plan, although nearly a fifth of shareholders voiced their opposition. The company said that 19.43% of shareholder voted against the pay deal at its AGM.
Still, with 80.57% backing the bonus package, it significantly exceeded the required 50% approval rate. The bonus deal is largely dependent on the firm's trading record in the forthcoming years.
He will receive a base salary of £824,570 but could potentially net an "enhanced multiplier" bonus up to 1,800% of his base salary if specific requirements are met. To secure the maximum £14.84 million, Ocado share price would need to hit 2,969 pence in three years and meet other performance targets.
The company's shares currently stand at 355p. Ocado highlighted Mr Steiner's role in founding the business and his "longer-term focus and strategic vision" when proposing the bonus scheme. The chief could still pocket nearly £5 million even if the company misses its share price objectives, provided it hits other benchmarks related to shareholder returns and performance metrics.
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Ahead of the crucial vote, shareholder advisory group Glass Lewis has called on investors to reject Ocado's pay scheme, slamming what they describe as "egregious remuneration practices". Campaign group ShareAction has also voiced its disapproval of the proposed pay agreement.
Dan Howard, head of good work at ShareAction, argued that the retailer "has a responsibility to ensure its lowest-paid workers are at least able to cover the cost of everyday goods and services", rather than sanctioning such a hefty pay deal.