Still in the money – Sainsbury’s boss in £3.9m pay row

SUPERMARKET giant Sainsbury’s has been blasted for ‘rewarding failure’ by handing bumper rewards to chief executive Mike Coupe despite a calamitous end to his attempted merger with Asda.

His plan to create a £50billion grocery giant was quashed by the Competition and Markets Authority (CMA) in April. The shares have since plummeted to a 30-year low.

Coupe caused outrage after he was caught on camera singing We’re In The Money the day the firm announced its merger plan.

He received £3.9million, 7 per cent more than he received a year earlier. That compares with the £4.6million handed to Tesco’s Dave Lewis, who has been lauded for reviving his firm’s fortunes.

In a report seen by The Mail on Sunday, shareholder advisory body Glass Lewis challenged Sainsbury’s board and pay committee to explain the size of executive bonuses following the shares crash.

‘The committee have failed to outline the impact, if any, of the failed deal on the bonus outcomes of the executives, particularly in light of share price performance as a direct result.’ It said the reward could represent ‘divergence of bonus outcome from shareholder experience’.

Shareholders are due to vote on pay at the firm’s annual meeting on July 4. Coupe is likely to face questions about the collapse of the share price to below £2 a share.

Siobhain McDonagh MP said Coupe should consider relinquishing some or all of his bonus. ‘Executive bonuses are supposed to be about rewarding success, but what we repeatedly do in corporate Britain is reward failure,’ she said.

‘Meanwhile, for longstanding shop floor staff with years of service, the same rules do not apply.’

Last year, Sainsbury’s was accused of cutting pay for 9,000 staff after it said it would reduce overtime premiums and scrap paid breaks for longserving workers. The contract change came as it lifted hourly pay. One employee said staff were ‘furious’, describing Coupe’s bonus as ‘astronomical’. ‘ As one of the loyal workers who is being forced to take a £1,000 pay cut, I am shocked at Mike Coupe’s insensitive, mercenary attitude.’

But Sainsbury’s chairman, Martin Scicluna, said last month the failed merger was ‘not a cock-up’. He said the CMA made its decision despite the ‘very good job’ the grocer did presenting its case.

Sainsbury’s said: ‘Executive pay is set by the remuneration committee and bonuses are subject to stretching targets. The business has hit a number of targets this year, including increasing profit, reducing net debt and increasing the dividend, which is why we have paid a bonus to eligible colleagues.

Underlying profits rose during the year, but when one-off costs were included, profits fell 42 per cent to £239million.

We’re In The Money is from the musical 42nd Street set in the Great Depression.