Sainsbury's investors choose to back the board

Investors in Sainsbury's overwhelming endorsed the grocer's executive pay policy yesterday at its annual meeting.

Pirc, the corporate governance body, had urged shareholders to oppose Sainsbury's remuneration report and lambasted as "excessive" the bonus, deferred awards and long-term incentive plans at the UK's third-biggest supermarket.

Its executive pay policy included a total package worth nearly £8m for Justin King, the chief executive of Sainsbury's, last year.

But just 2 per cent of shareholders either abstained or voted against the grocer's remuneration report, with the remainder supporting it. The hefty endorsement followed a major rebellion over pay at rival Tesco earlier this month, when only 53 per cent of votes were cast in favour of the UK market leader's remuneration.

All of the resolutions at the Sainsbury's annual meeting were passed resoundingly. David Tyler, the chairman of Sainsbury's, said: "Our pay is certainly not excessive." He also praised the job done by Mr King, who took the helm at the grocer in March 2004.

Sainsbury's delivered underlying pre-tax profits up by 17.5 per cent to £610m over the 52 weeks to 20 March.

Mr King was paid a salary of £900,000 and a bonus of almost £1.1m last year. When added to other benefits including his pension, he was paid a total of £3.45m. In addition, Mr King exercised share options worth £4.5m.

Last week, Mr King sold shares in Sainsbury's worth £1.6m. This dampened recent speculation that the Qatar Investment Authority, which owns a 26 per cent stake, may be planning a takeover bid.