Activist shareholder group targets Morrisons bonus plans

Shareholder advisory group ISS is one of several advisors to urge investors in Morrisons to vote against the supermarkets plans to pay bonuses to its bosses.

It’s being reported that there will be a “large protest vote” at the upcoming AGM on the 10 June, after the Bradford-based firm removed the £290m cost of dealing with the pandemic before calculating executive bonuses.

David Potts, chief executive officer, Morrisons

Despite this protest vote sources have reported that “a number of leading shareholders” will back the payout which includes a cash bonus for the chief executive David Potts of £850,000 alongside a deferred award of the same size, and restricted stock worth almost £1.4m.

ISS noted that a significant portion of Potts’s payout would not be there had the firm taken into account the impact of Covid on the business, stating that 50% of Potts is bonus is determined by a profit-before-tax measure and that 20% of his restricted stock award is determined using an earnings-per-share metric that would not have paid out had the £290m costs been included in calculations.

A Morrisons spokesman stated: “The [remuneration] committee felt that having been instructed to feed the nation – and in doing so endured a year of effort like no other – management and all store managers should not be penalised for their outstanding performance or for taking the steps necessary to protect colleagues and recognise their hard work.”

An insider has also highlighted to Sky News that this bonus scheme follows Potts waiving a pay rise for the fifth consecutive year running, and that two years ago both he and the firm’s chief operating officer, Trevor Strain, had waived 20% of their bonus as they didn’t believe it was warranted by the supermarket’s performance.

Morrisons saw profits fall 50% as a result of Covid-19 after repaying £230m of Government business rates relief. Despite this the supermarket has been since provided a market update predicting two strong years of growth for the business.

Click here to sign up to receive our new South West business news...
Close