Ocado faces storm over boss Tim Steiner’s £100m bonanza


The boss of Ocado faces a shareholder rebellion over an ‘outrageous’ pay plan that could reward him with up to £100 million – just as the rest of the country faces a brutal cost of living crunch. 

Investors say the scheme that could award the food delivery and technology group’s chief executive Tim Steiner the ‘lavish’ sum goes too far at a time when millions of households are being squeezed. 

The warnings set the stage for a showdown on Wednesday between investors and Steiner, who has repeatedly come under fire over his remuneration. He could receive the sum over five years if the share price triples under a controversial ‘value creation scheme’. Investors attacked similar plans at the last two annual meetings. 

Opulence: Tim Steiner splashed out £25million for his 156ft luxury yacht called Silver Fox and now he could reap another £20million a year

Steiner, 52, who in 2018 bought a £25 million 156ft yacht which he named Silver Fox, missed his share price target that would have triggered a £20 million bonus in March. Now Ocado wants to extend the scheme, giving him the chance to make £20 million a year until 2027. 

Steiner is regarded as one of Britain’s top technology entrepreneurs. He built Ocado from scratch and turned it into a hugely successful business. 

The pay plan has sparked complaints from leading Ocado shareholder Royal London, as well as investor advisers Glass Lewis and Institutional Shareholder Services. 

Legal & General Investment Management (LGIM), one of the City’s most important institutions, has voted against the scheme consistently in the past. 

Pay campaigners are on alert over grossly excessive awards as inflation spirals and interest rates are set to rise amid the worst cost-of-living crisis for decades. 

The latest furore comes after The Mail on Sunday last week revealed that Andy Hornby, boss of The Restaurant Group, accepted a huge bonus while his company benefited from tens of millions of pounds of taxpayer support. 

A flood of other pay protests – involving companies including cruise giant Carnival, betting group Flutter and magazine firm Future – have rocked the City. 

Pensions titan LGIM, which manages £1.4 trillion of savers’ cash, voted against 137 UK pay reports last year – near a quarter of the companies in which it invests here. 

Twenty two, or 16 per cent, of those displayed pandemic greed – relying on Government Covid support or tapping shareholders while dishing out massive bonuses to bosses. 

In a report last week, LGIM said: ‘The practice of insulating executives against economic downturns when the same level of protection is not offered to other stakeholders is unacceptable.’ 

The pay plan at Ocado – based in Hatfield, Hertfordshire – was meant to run for five years until 2024. It was designed to award Steiner up to £20 million annually and gave other executives up to £5 million a year. When it launched in 2020, Ocado said executive directors would receive higher rewards ‘only if shareholders benefit from sustained share price growth over a five-year period’. 

Ocado’s investors were stunned when shares in the company rocketed to more than £28 during the heights of the pandemic. The share price has since dropped to £9.30 – way below target projections for future payouts. 

Critics this weekend blasted Ocado for shrugging off previous shareholder concerns. 

Sophie Johnson, corporate governance manager at Royal London Asset Management, said: ‘The company’s value creation plan has the potential to pay out up to £20 million annually based on a single performance metric. This effectively eliminates the concept of pay-for-performance and ensures that pay will remain high.’ 

Luke Hildyard, director of the High Pay Centre, said: ‘It’s really quite surprising that companies continue to choose to hand out ever more lavish pay packages at a time when their own colleagues and customers are being hit hard by rising prices and stagnating pay.’

Karoline Herms, senior global ESG manager at LGIM, said the asset manager has not yet declared its voting intention this year but has voted against Ocado’s plan since its inception. She said: ‘It is a company that pops up with some pretty outrageous pay structures.’

Pension fund adviser ISS urged shareholders to vote against the plan. Another top adviser, Glass Lewis, said the plan could make executives eligible for ‘extremely large’ sums based solely on the share price and not on management performance. 

Nearly 30 per cent of Ocado investors voted against the award scheme when it was implemented in 2020 and about 13 per cent voted against it last year. Ocado said: ‘Pay schemes – past and present – are approved by shareholders and only deliver above-market payouts for the delivery of above-market, outstanding results.’ 

Last week Flutter, the owner of Paddy Power and Betfair, saw a third of investors vote against executive pay. 

The MoS also revealed The Restaurant Group boss Andy Hornby pocketed a £578,000 bonus despite receiving tens of millions of pounds of state aid during the pandemic. London-based bank Standard Chartered faces a backlash this week after it received a £47million fine from regulators over governance failings. 

Read more at DailyMail.co.uk