Investor backlash to hit Morrisons over chief executive pay
Morrisons is facing a rebellion by investors over the pay package of chief executive David Potts.
Major investor advisory group Institutional Shareholder Services, is said to be recommending a vote against the supermarket’s pay report at the general meeting on Thursday, which sees Potts’ long term share award increase to 300% of his salary, up from 240%.
Potts is paid £850,000 a year for his role leading Britain’s fourth biggest supermarket. Under the new package, he could receive £5.3m. It is braced for a backlash in the boardroom, according to Sky News, with ISS expressing concern over the pay hike despite reduced targets.
ISS, which advises more than 1,700 of the world’s biggest investors, can influence around 25% of the shareholder base, though it may not have the ear of several big City investors, pleased with the turnaround at the Bradford-based supermarket.
In a letter to shareholders seen by Sky News, Andy Higginson, Morrisons’ chairman, said:”An important piece of context is that in moving to a 300% award, our normal LTIP grant of 240% is below market median (275%).
“We do not believe that anything about the current performance of management, or the scale of the turnaround, is average and have therefore opted for an award level that reflects the opportunity to create long-term sustainable value for shareholders.”
Morrisons has seen the fastest growth of the Big Four supermarkets this year, with its sixth consecutive period of sales growth under its belt and profits up 50% for the year to 29 January, reaching £325m.
This comes against a backdrop of revolt against the pay packages of senior executives, particularly under long-term incentive plans, with the boards of Asos and WPP, amongst others, facing backlash.
