Morrisons boss Potts set for pay package hike

Chief executive David Potts, who is paid £850,000 a year, is set to be rewarded for Morrisons’ ongoing turnaround with a controversial pay package.

Shareholders are reportedly pushing for a pay rise for Potts despite a hostile climate towards increased executive pay, according to The Telegraph.

The Bradford supermarket group said that a decision had been made to increase Potts’ long-term incentive plan, which means he could receive a £5.3m total pay package, after becoming eligible to receive a plan which would see a payout of 300% of his salary.

His current incentive plan allows for a payout of 240% of his salary and he is eligible for a bonus of 200% of his salary. A stipulation is that he must defer half of this into Morrisons shares for the first three years. In 2016 he earned £2.8m including wages and bonuses.

Chairman Andrew Higginson said: “It is no coincidence that Morrisons’ much improved performance coincides with the appointment of David and his new senior team

“Morrisons’ skilled food makers and shopkeepers are loyal, passionate and dedicated, and virtually all are unchanged since David started. Whilst all have contributed to the improved performance, it is the leadership that has changed.”

Morrisons has been one of the fastest growing of the Big Four supermarkets in recent months. In Q1 trading for the 13 weeks to 30 April, like-for-like sales excluding fuel were up 3.4%.

However the controversy surrounding pay follows an appeal in April by a cross-party committee of MPs, calling on the Government to ban companies awarding complex, share-based pay schemes to bosses, saying they encourage short term decision making.

WPP was at the heart of the controversy, after awarding chief executive Sir Martin Sorrell £42m in shares. Closer to home, Asos directors faced a backlash after planning to pay themselves lucrative bonuses, but a minor shareholder revolt was not enough to halt remuneration plans. BP also fell foul to the ire of shareholders, this time rejecting group CEO Bob Dudley’s £14m pay deal, and 40% of AstraZeneca shareholders rejected an increased pay package for bosses last month.