Ocado investor Royal London Asset Management rejects pay policy again

LONDON (Reuters) -Ocado shareholder Royal London Asset Management (RLAM) said on Tuesday it had again voted against the online supermarket and technology group’s pay policy, citing concerns over potentially excessive rewards for its executives.

RLAM, which has a 0.3% stake in Ocado, said the company’s decision to extend its value creation plan will see executives receive up to 20 million pounds ($25.1 million) a year in awards.

“This is another example of how poorly designed incentive plans can lead to excessive awards for management,” said Sophie Johnson, RLAM’s corporate governance manager.

She said RLAM would have preferred a more balanced long-term incentive plan with a range of measures looking at different aspects of performance and the overall health of the business.

Investors have become more vocal in their opposition to boardroom pay deals they deem excessive amid society’s broader struggles in the pandemic and now a cost of living crisis.

Ocado’s annual shareholders’ meeting (AGM) will be held on Wednesday.

The group said it recognised that executive remuneration should be closely aligned to driving the long-term success of the business.

“Our current scheme rewards significant and sustained shareholder value creation, and its value will be determined by how the share price performs over the period,” said a spokesperson.

“Ocado’s pay schemes, past and present, are approved by shareholders and only deliver above-market pay-outs for the delivery of above-market, outstanding results.”

At last year’s AGM, 12.7% of votes cast opposed Ocado’s 2020 pay report.

In 2020, almost 30% of votes cast opposed Ocado’s 2019 pay report, which included a 58.7 million pound ($73.7 million) package for co-founder and Chief Executive Tim Steiner.

Shares in Ocado have fallen 57% over the last year.

($1 = 0.7962 pounds)

(Reporting by James Davey; Editing by Kylie MacLellan and Jan Harvey)