The Scottish Mail on Sunday

‘Easy tar­gets’ for Mor­risons chief’s bonus come un­der fire

- By Neil Craven

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.’

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