Ocado delivers £58m bonus for boss (af ter he made £214m loss)
The boss of Ocado bagged a £58.7million payday last year despite losses at the FTSe 100 firm widening.
The online supermarket has been a runaway success on the stock market thanks to its ability to sell futuristic robotic warehouses abroad.
Yesterday the company announced that co-founder and chief executive Tim Steiner, 50, would receive performance bonuses of £58million on top of his basic salary.
This is one of the largest ever pay packets paid to a British chief executive, falling just below the £70million paid to advertising mogul Sir Martin Sorrell in 2015.
It is a large increase on the £4million which Steiner received last year, and follows a shareholder revolt against the company’s pay policy at its annual general meeting.
Ocado’s fortunes on the stock market have propelled Steiner, a former banker who founded the company in 2000, into the realms of the UK’s super-rich. Under his leadership, Ocado shares have risen more than five-fold since late 2017. A saver who invested £1,000 in Ocado in December 2017 would now have £5,255.
Yesterday the value of Mr Steiner’s shareholding in Ocado had increased to close to £296million. he is also in line to receive a special £100million bonus if the share price continues to soar in the next five years.
The eye-watering pay packet came as the company’s losses ballooned from £44million to £214million, which it blamed in part on a fire at its warehouse in Andover last year. Steiner’s pay packet caused anger amongst campaigners.
Luke hildyard, of the high Pay Centre, said: ‘If payments of this size are necessary to incentivise or reward good leadership, that doesn’t reflect well on the values of UK business leaders.’
The largest component of Steiner’s 2019 pay was a ‘growth incentive plan’, which paid £54million if Ocado’s share price outgrew its stock market rivals by more than 20 per cent per year between 2014 and 2019.
Finance chief Duncan
Tatton-Brown and operations director Mark Richardson both banked £14million, while Luke Jensen, who runs Ocado’s technology business, received £6million.
Steiner’s fortune was dented in 2016 after he split his then £116million wealth with his wife of 14 years, Belinda, after a court battle.
Last year MPs demanded a curb on ‘eye-watering’ earnings for bosses of the UK’s biggest listed companies.
The average boss of a FTSe100 index company in the UK earns 140 times as much as their staff. In Mr Steiner’s case, this will now be considerably more.
Britain’s bosses are now the second-best paid in europe behind Switzerland. Ocado, announcing its annual results yesterday, also gave an update on its plans to launch Marks & Spencer’s first home delivery service in September. Mr Steiner said: ‘M&S is looking cheaper and our overall range will increase.’
Ocado has also been investing heavily in its technology arm and signed deals with supermarkets in five countries to use its delivery technology.
Ocado declined to comment on Mr Steiner’s pay.
OCADO will double the amount it is spending on robotic warehouses to £600m this year as it prepares to launch partnerships overseas.
It plans to open its first delivery facilities for Sobeys in Toronto and Casino in Paris.
It has signed deals with major supermarkets in the US, Australia, Japan and Sweden, and boasts its partners have a £210bn combined annual revenue. Thirty warehouses are expected to be built abroad in the next few years.
The growth of Ocado landed cofounder and chief executive Tim Steiner £58.7m in pay last year.
This included a £54m bonus paid on the back of an average share price rise of 31pc a year between 2014 and 2019. Yesgterday, shares rose 3.1pc, or 37.5p, to 1254.5p.
But it also revealed that losses ballooned from £44m to £214m last year, which it blamed in part on a fire at warehouses in Andover, Hampshire, last February.
Revenues rose 9.9pc to £1.7bn in the year to December 31, driven largely by its retail division, which was up 10.3pc to £1.6bn.
The company booked a £112m charge in rebuilding costs and lost capacity, much of which will be recouped from insurers. Ocado has gone into business with Marks & Spencer and will begin delivering its products from September.
The online supermarket is continuing to open smaller sites in the UK, and Steiner defended Ocado’s warehouse next to a school in north London, where the company has faced a local revolt over pollution and safety fears.
Broker Peel Hunt said it was ‘excited’ about Ocado’s prospects, while Joe Healey, analyst at The Share Centre, said the results ‘show a bright spark in the maligned grocery sector’. ÷ A FORMER Goldman Sachs banker and chief finance officer for one of the UK’s biggest sandwich-makers has joined Marks & Spencer as its new finance chief.
Eoin Tonge joins from Greencore, replacing Humphrey Singer. Tonge will receive a basic salary of £600,000.