Ocado faces storm over boss’s £100m bonanza
Investor revolt over ‘lavish’ pay deal as cost of living crisis rages
THE boss of Ocado faces a shareholder rebellion over an ‘outrageous’ pay plan that could reward him with up to £100million – just as the rest of the country faces a brutal cost of living crunch.
Investors say the scheme that could award the food delivery and technology group’s chief executive Tim Steiner the ‘lavish’ sum goes too far at a time when millions of households are being squeezed.
The warnings set the stage for a showdown on Wednesday between investors and Steiner, who has repeatedly come under fire over his remuneration. He could receive the sum over five years if the share price triples under a controversial ‘value creation scheme’. Investors attacked similar plans at the last two annual meetings.
Steiner, 52, who in 2018 bought a £25million 156ft yacht which he named Silver
Fox, missed his share price target that would have triggered a £20million bonus in March. Now Ocado wants
to extend the scheme, giving him the chance to
make £20million a year until 2027.
Steiner is regarded as one of Britain’s top technology entrepreneurs. He built Ocado from scratch and turned it into a hugely successful business.
The pay plan has sparked complaints from leading Ocado shareholder Royal London, as well as investor advisers Glass Lewis and Institutional Shareholder Services.
Legal & General Investment Management (LGIM), one of the City’s most important institutions, has voted against the scheme consistently in the past.
Pay campaigners are on alert over grossly excessive awards as
inflation spirals and interest rates are set to rise amid the worst costof-living crisis for decades. The latest furore comes after The Mail on Sunday last week revealed that Andy Hornby, boss of The Restaurant Group, accepted a huge bonus while his company benefited from tens of millions of pounds of taxpayer support. A flood of other pay protests – involving companies including cruise giant Carnival, betting group Flutter and magazine firm Future – have rocked the City.
Pensions titan LGIM, which manages £1.4 trillion of savers’ cash, voted against 137 UK pay reports last year – near a quarter of the companies in which it invests here.
Twenty two, or 16 per cent, of those displayed pandemic greed – relying on Government Covid support or tapping shareholders while dishing out massive bonuses to bosses.
In a report last week, LGIM said: ‘The practice of insulating executives against economic downturns when the same level of protection is not offered to other stakeholders is unacceptable.’ The pay plan at Ocado – based in Hatfield, Hertfordshire
– was meant to run for five years until 2024. It was designed to award Steiner up to £20 million annually and gave other executives up to £5million a year. When it launched in 2020, Ocado said executive directors would receive higher rewards ‘only if shareholders benefit from sustained share price growth over a five-year period’.
Ocado’s investors were stunned when shares in the company rocketed to more than £28 during the
heights of the pandemic. The share price has since dropped to £9.30 – way below target projections for future payouts.
Critics this weekend blasted Ocado for shrugging off previous shareholder concerns.
Sophie Johnson, corporate governance manager at Royal London Asset Management, said: ‘The company’s value creation plan has the potential to pay out up to £20million annually based on a single performance metric. This effectively eliminates the concept of pay-forperformance and ensures that pay will remain high.’
Luke Hildyard, director of the High Pay Centre, said: ‘It’s really quite surprising that companies
continue to choose to hand out ever more lavish pay packages at