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May 03, 2023

Ocado suffers 30 percent revolt over remuneration report

Tensions continue over firm’s approach to executive pay

Ocado, the UK-based online grocery company, suffered a shareholder revolt over executive compensation at its AGM this week.

Nearly a third (30 percent) of investors voted against the directors’ remuneration report, according to a stock exchange filing.

In the UK, companies are required to put the remuneration report, which covers the previous year's pay awards, to an advisory vote. 

In the run-up to the meeting, proxy advisers had raised concerns over Ocado’s approach to compensation, including its long-term value creation plan and annual-bonus metrics.  

In the filing, Ocado notes the vote outcome but defends the annual and long-term elements of its compensation plan.

The current remuneration policy ‘offers the best way to incentivise management and drive exceptional and sustainable long-term growth of the group, while also rewarding short-term operational and strategic decisions,' it says.

Investor tensions

Ocado will now consult with shareholders over the vote and report back in six months, a process expected under the UK Corporate Governance Code.

The UK issuer has experienced long-standing tensions with investors and proxy advisers over its executive compensation.

At last year’s AGM, a similar proportion of votes – 29 percent – were cast against the forward-looking remuneration policy.

The latest investor revolt follows Ocado’s annual results in February, when it revealed losses for the 2022 financial year of £501 mn ($627 mn), up from £177 mn in 2021.

In the results announcement, CEO Tim Steiner said the group’s UK retail business had been affected by ‘the Covid unwind and the UK cost-of-living crisis’.