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Morrisons chairman 'surprised' as almost half of shareholders reject pay report


Morrisons chairman Andy Higginson said he was 'surprised' by the vote

Morrisons chairman Andy Higginson said he was 'surprised' by the vote

Morrisons chairman Andy Higginson said he was 'surprised' by the vote

Morrisons shareholders have vented their anger over a planned bonus bump for chief executive David Potts, with nearly half voting against the supermarket's remuneration report.

Chairman Andy Higginson said he was "surprised" by the result, which saw 48.11% of shareholder votes cast against the remuneration report, which looks back at the way that the company's pay policy has been applied over the past year.

Only 51.89% voted in favour at its annual general meeting (AGM).

Chairman Andy Higginson said: "We consulted widely with shareholders on the new remuneration policy which received strong support with more than 92% in favour so we were surprised not to get a higher vote in favour of the Directors' Remuneration Report."

Shareholder advisory group Institutional Shareholder Services (ISS) had urged shareholders to reject the report, arguing that performance targets for Mr Potts were too low, while increases to the long-term incentive plan (LTIP) award were above average.

Morrisons' remuneration committee had outlined plans to increase the potential LTIP award to 300% of director salary from 240%.

If the LTIP and other award targets were met - including those for free cash flow, sales and earnings per share growth - it would result in Mr Potts receiving a total pay package of £5.3 million in 2020, compared to the £2.79 million he received for 2016/2017.

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Mr Higginson said he "fundamentally disagreed" with ISS' assessment of the company's targets.

"Not only does the board believe the targets to be significant and stretching, but the judgement on what the right measures are goes to the heart of rebuilding the business for the long term - striking the right balance between investment in the business and continued outperformance," Mr Higginson said.

The company's remuneration policy, which outlines the way the company intends to reward its executives over the coming years, passed by 92.35%.

However, 7.65% of votes were cast in opposition to the policy.

The vote for the remuneration report was not binding, though a shareholder rebellion against the policy would have forced the company to make changes to its director pay plans.

Morrisons earlier this year reported a 49.8% jump in pre-tax profits to £325 million while revenue rose 1.2% to £16.3 billion, solidifying the chain's return to form under Mr Potts.

On top of a deal to sell its groceries through tech retail giant Amazon, Mr Potts has ploughed investment into price cuts and called time on under-performing stores in his attempts to turn the page on the supermarket's ill-fated era under ousted boss Dalton Philips.

His efforts come as the grocery sector's so-called Big Four - Tesco, Asda, Sainsbury's and Morrisons - remain locked in a bitter price war sparked by German discounters Aldi and Lidl.