The Scottish Mail on Sunday
‘Easy targets’ for Morrisons chief’s bonus come under fire
MORRISONS boss David Potts could take home £10 million over the next three years after the supermarket’s board set bonus targets described in the City as ‘inexplicably low’.
He could get double his £850,000 salary in bonuses for the next two years, while in 2020 he could rake in five times his pay in annual and long-term bonuses.
Potts, who has turned around the fortunes of the supermarket giant, earned £2.8million last year, taking his total in the past two years to more than £5million.
Under Potts, Morrisons shares have outperformed rivals Tesco and Sainsbury’s in the past 12 months, adding almost £1.5 billion to the firm’s value.
To achieve his long-term bonus, Potts will have to raise sales by 2 per cent a year and lift free cash flow by £800million. Observers say this will be easy with rising inflation and the existing pace of change.
Barclays Bank analyst James Anstead expressed surprise at the sales target and described the cash flow target as ‘inexplicably low’ and ‘a soft target’.
Speaking ahead of the shareholder meeting in Bradford on Thursday, Andy Higginson, chairman of Morrisons, said: ‘The change in leadership has been key in recent improved performance. Our incentives will only pay out in full if outstanding long-term performance is delivered.’