About two-fifths of shareholders in the British online food delivery company Ocado voted against the CEO bonus plan, which would give CEO Tim Steiner a payout of £ 100 million over the next five years.
A recent shareholder vote showed that just over 29% rejected the company’s previously developed remuneration policy.
The Okado Remuneration Committee requested approval for a three-year extension of the bonus scheme, and despite a significant number of rebel shareholders, the plan was eventually approved.
The contested endorsement of the CEO bonus scheme comes as Ocado’s share price has fallen 46% since the beginning of the year as the online grocery pandemic boom continues to weaken.
The increase in the pandemic’s online supply, while benefiting Ocado, has also led to the rise of fast food delivery companies such as Gorillas and Getir, which compete directly with Ocado.
The head of Ocado Retail – a joint venture of M&S Group and Ocado Group – had previously expressed skepticism about fast delivery.
Ocado fails to meet the share price target
The bonus scheme, which was originally announced in 2019, is related to the presentation of the company’s shares. However, Okado failed to meet the share price target, which will trigger Steiner’s payout of £ 20 million.
While a significant number have tried to block the extension amid stock concerns, the scheme has now been extended for an additional five years until 2027.
The recent payment offer has been criticized by Ocado’s leading shareholder, Royal London Asset Management (RLAM).
An RLAM spokesman described the group’s concern, saying the bonus plan was “an example of how poorly designed incentive plans” can “lead to excessive rewards for management”.
Ocado issued a statement after the approval, saying: “Many of our largest shareholders understood the strategic rationale for continuing to operate a non-standard long-term leverage incentive plan at Ocado and expressed their support for our proposals to expand the scheme beyond its original a five-year term. “
The statement said that “challenges related to recruitment internationally and the competition for talent in the technology sector.”