British online grocery retailer Ocado finds itself in hot water after a proposed bonus plan for co-founder and chief executive Tim Steiner sparked investor discontent at the company’s annual general meeting.
The plan, with a potential payout of £14.8m ($18.57m) for Steiner, faced opposition from nearly 20% of investors, who cast their votes against it.
Go deeper with GlobalData
Shareholder advisory groups and activist organisations such as ShareAction took aim at the significant pay disparity between Steiner’s potential bonus and the wages of Ocado’s frontline workers.
They argued that the company should prioritise fair compensation for all employees, especially considering Ocado’s recent financial performance.
The company reported a pre-tax loss of £394m last year, raising questions about the justification for such a hefty bonus proposal.
Ocado’s chair, Rick Haythornthwaite, rose to defend the proposed pay scheme. He emphasised Steiner’s role as a founder who built the company from the ground up.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataAccording to UK newspaper the Telegraph, Haythornthwaite argued that Steiner’s “longer-term focus and strategic vision” were instrumental to Ocado’s success, and his compensation should reflect that contribution.
He further emphasised the competitive landscape of executive compensation, suggesting that attractive pay packages are necessary to retain talent and compete with the US market.
The controversy surrounding Ocado’s CEO pay plan taps into a wider debate about executive compensation in the UK.
Investors are increasingly scrutinising pay structures, particularly when they seem out of sync with a company’s financial health or its treatment of lower-level employees.
Ocado’s situation remains unresolved as the company navigates investor concerns while defending its approach to executive pay.
This incident highlights the growing pressure on companies to strike a balance between rewarding leadership and ensuring fair compensation across all employee levels.
