Executive directors at Morrisons to return a third of bonus payments
The chief executive and chief financial officer at Bradford-headquartered supermarket Morrisons are to hand back a third of their bonuses.
CEO David Potts and CFO Trevor Strain were each due to receive a bonus that amounted to twice their salary. However, while the Big Four supermarket has seen improved performance in recent months, certain objectives around pre-tax profits, like-for-like sales and sales objectives had not been hit. The changes in their remuneration packages were discussed at the listed firm’s annual report announcement yesterday.
Their bonus schemes have reduced from 96.2% of the maximum achievable to 61%. This results in Potts returning £598,000 and Strain returning £437,000.
The annual report states: “Taking into account performance against personal objectives, the committee has decided to aware David Potts and Trevor Strain each a full 20% of this element [bonus scheme].
“Taking into consideration the overall performance of the group, they have taken the decision to waive all of this element of their bonus. This takes the total bonus achieved to a payout of 61% maximum.”
Overall for the 52 weeks ended 3 February 2019, Morrisons spent £9m on salaries and share-based payments for the board of directors, which include seven non-executive directors. This was down slightly on last year when they spent £10m on their top team.
Potts stepped into the role in 2015 after time as a Tesco executive to aid the turnaround of the business, at the time a struggling supermarket which was reporting sales declines over several consecutive quarters.
Since then Morrisons has seen encouraging growth, with a 10.3% market share putting it comfortably ahead of European entrants to the supermarket sector Aldi and Lidl in fourth place. It also reported growth in every quarter last year.
However it has also had its fair share of troubles. In October 2018 the high Court found the supermarket legally responsible for a data breach which affected 100,000 employees. In April it was granted permission to appeal the verdict.
In February it was announced that further legal action would be taken by female employees who said they were not paid the same as men in comparable jobs.
The announcement comes against a backdrop of shareholder revolts over director remuneration, which has seen investors vote against massive payouts in swathes.