Ocado is facing a potential shareholder revolt after an influential proxy adviser rallied its investors to vote against the group’s new bonus scheme that could see CEO Tim Steiner receive as much as £14.8m.
The Institutional Shareholder Services (ISS) has advised shareholders to vote to block the online grocer’s new bonus policy and performance share plan at next month’s annual meeting over “material concerns” on the potential amount of money executives could receive, reported The Times.
The ISS said that the remuneration scheme was a “high concern” and would see executives rewarded “materially above market norms” and “not in line with UK market standards and investor expectations”.
It added that the concerns over the incentive schemes 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”.
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The group’s new proposal would award Steiner a bonus worth as much as 1,800% of his £824,570 base salary if Ocado’s share price hits £29.69 in three years’ time and on the condition all other performance targets are are met.
Steiner would also be able to receive an award worth 600% of his base salary, or almost £5m, if targets for total shareholder returns and other performance measures are hit but the share price goal is still missed.
Ocado said that its bonus proposal had been made to be mindful of Steiner’s “unique position” as the online retailer’s founder and his “longer-term focus and strategic vision”.
In recent years, Ocado has faced mixed results. During the pandemic, the supermarket’s share price soared to more than £28 amid increased demand for online groceries.
Yet a recent public spat with M&S over performance-linked payments and a return of shoppers to bricks-and-mortar stores has seen the retailer’s share price fall to £4.68 in recent days.
Ocado declined to comment.
