A recent Ocado shareholder meeting drew significant attention as nearly 20% of shareholders expressed their dissent against the company's proposed remuneration policy. The bone of contention was a potential bonus of up to £14.8 million for Ocado's co-founder and Chief Executive, Tim Steiner. This hefty bonus is contingent upon Ocado's share price hitting £29.69 within three years, amongst other performance targets.
The proposed incentive plan has sparked outrage, particularly in light of Ocado's current share price trading at less than £4, a stark contrast to the ambitious £29.69 goal. Additionally, concerns have been raised regarding the company's financial performance, with Ocado reporting a significant annual pre-tax loss of £394 million on sales of £2.7 billion last year.
Amidst the dissent, shareholder advisory groups have voiced opposition to what they perceive as "excessive pay" and a departure from market norms. The discontent is further fuelled by Ocado's turbulent financial trajectory, marked by a plummet in market value from £21.6 billion to less than £3 billion in four years.
Critics argue that while Ocado seeks to reward its top executive handsomely, the disparity in pay between its highest earners and lowest-paid workers remains glaring. Despite discussions about addressing low pay over the past five years, Ocado has yet to commit to paying its employees the real living wage. This stands in stark contrast to other retailers like Tesco, Sainsbury's and Marks & Spencer, all of which have made commitments to paying their staff the real living wage as a base rate.
Campaigners emphasize the tangible impact that paying the real living wage could have on the lives of Ocado's lowest-paid workers. The call for action gains resonance in the wake of Marks & Spencer's recent announcement of a new retail pay offer, which increased wages for 40,000 customer assistants to £12 per hour.
Dan Howard, head of the workplace inequality campaigning organisation Good Work said:
“Ocado has been talking about addressing low pay for five years but has yet to make a long-term commitment. We’re calling on the board to pay the real living wage. This would make a significant difference to the lives of hundreds of its lowest-paid workers.”
The disparity in pay and the apparent misalignment between executive rewards and employee welfare underscore broader concerns about corporate governance and social responsibility. As Ocado shareholders navigate these issues, the spotlight remains firmly fixed on the company's commitment to equitable pay practices.
