Shareholders gave the Ocado board a bloody nose yesterday as almost a quarter of them voted against the online grocer’s executive pay packages.
The setback for the loss-making retailer came after it again stressed that any deal to license its technology to supermarket chain Morrisons would be “complementary” to its long-term supply agreement with Waitrose. Some 23.5 per cent of investors failed to support the grocer’s remuneration report, although that climbed to 24.2 per cent once abstentions are included. This compares with 2.4 per cent who voted against its pay rewards for executives in 2012 and 1.2 per cent last year.
The Association of British Insurers had previously attacked the Ocado’s long-term incentive plan for being opaque, which may have influenced 14 per cent of investors in failing to back it yesterday. Chairman Lord Grade – who yesterday passed the baton to Sir Stuart Rose, the former chief executive of Marks & Spencer – had banned the media from the AGM.
Before the meeting, he said: “The LTIP plan is intended to act as the primary link between executive reward and the longer-term performance and objectives of the company. Best practice is commonly regarded as those schemes which have a three-year vesting schedule and are subject to malus [penalty] and clawback.” Ocado, which has not made an annual pre-tax profit in 11 years, said its talks with Morrisons were continuing.