Sainsbury under fire as foreign investors scoop dividend bonanza

Sainsbury’s under fire for huge rise in dividends – large chunk of which will go to foreign shareholders – while staff and shoppers struggle with the cost-of-living

Payout: Billionaire Daniel Kretinsky

Supermarket giant Sainsbury’s is under fire for declaring a huge rise in dividends – a large chunk of which will go to foreign shareholders – while shoppers and staff struggle with the cost-of-living crisis. 

It comes as the company prepares to unveil a sizeable bonus for chief executive Simon Roberts, who says the grocery chain is doing ‘everything it can’ to cut prices and protect customers and staff from inflation. But having waived his previous bonus due to the pandemic, he is in line for a big payday this year. Investors are about to share in £300million of dividends. 

The dividend is 24 per cent higher than in 2021 and the largest since 2015. Profits doubled last year to £730million but are expected to drop back this year. A quarter of the payout – £75million – will go to the two biggest shareholders, the Qatar Investment Authority, which has a 15 per cent stake, and billionaire Daniel Kretinsky, nicknamed the Czech Sphinx, who has 10 per cent. 

‘This tells quite a sad story about inequality and the way the modern economy works,’ said Luke Hildyard of the High Pay Centre. 

‘Businesses have a responsibility to do the right thing by shareholders, customers and workers. Our research shows companies prioritising the interests of wealthy investors and executives over ordinary employees time and time again. It is driving an increasing belief that big business doesn’t act in the interests of the country as a whole.’ 

Roberts is eligible this year for a bonus worth up to 220 per cent of his £875,000 salary. That would take his total package to nearly £3million. He waived a £1million bonus last year amid the ‘unexpected pressures’ facing the business and its staff. Sainsbury’s said at the time it was ‘another example of his integrity as a leader’. His total pay packet then came to £1.3million. 

Asked by The Mail on Sunday if he would forgo his bonus again this year, he declined to answer. 

The uproar over Roberts’ potential payout comes a week after Sainsbury’s doubled down on a £500million price-cutting spree. 

The grocer is also facing demands from some shareholders, led by campaign group ShareAction, to commit to paying a ‘real living wage’, an independently-set measure that is higher than the statutory minimum. A resolution on the matter will be put to the vote at next month’s annual meeting. 

Sainsbury’s has spent £100million this year increasing salaries and was the first major retailer to pay the real living wage of £11.05 an hour in London and slightly lower elsewhere. But it wants to retain the flexibility to manage its wage bills rather than lock itself into higher pay levels set by a third party. 

Rival supermarket Tesco has also been slammed over its chief executive, Ken Murphy, pocketing £4.75million amid soaring prices. His package included a £3.2million bonus as Tesco’s pre-tax profits more than doubled following the easing of Covid restrictions. 

Tesco is paying £704million in dividends, up 19 per cent on 2021. But rather than large chunks going to a few big foreign investors, its shareholdings are broadly spread among large institutions that look after pensions and savings cash. 

Sainsbury’s said: ‘As a listed business we always try to balance the needs of all our stakeholders, including our customers, colleagues, suppliers and shareholders. 

‘The vast majority of Sainsbury’s shareholders are UK pension funds and private investors – including Sainsbury’s colleagues – for whom dividends are vitally important. 

‘We understand that households are counting every penny right now, and that’s why by the end of the year we will have spent over £500million to keep prices down on the essential items our customers buy the most.’ 

A recent by report the High Pay Centre, the Trades Union Congress and the Common Wealth think-tank found that the proportion of UK shares directly held by domestic pension funds fell from almost one in three in 1990 to less than one in 25 by 2018.