Morrisons boss suffers huge revolt over £1.7m bonus

Dave Potts

image copyrightMorrisons

Supermarket Morrisons has suffered a huge shareholder revolt over plans to award bumper pay deals to its bosses.

Just over 70% of shareholder votes were cast against the firm’s remuneration proposals, which include paying chief executive David Potts a maximum £1.7m bonus despite a big fall in profits.

The board had stripped out the cost of the pandemic when calculating bonuses.

The vote is non-binding, and Morrisons said it would now contact investors to again “make the case” for the awards.

Pirc, a shareholder advisory group that urged investors to reject Morrisons’ plans, said the revolt was one of the biggest on record. Thursday’s news marks the latest investor protest against rewards for top executives.

Morrisons said it was disappointed by the result, which was announced at the supermarket’s annual shareholder meeting in Bradford.

“In these circumstances, the remuneration committee believed that it was appropriate to apply some discretion to the remuneration of the senior executives,” Morrisons said in a statement.

“It is a matter of sincere regret to the committee that it clearly has not been able to convince a majority of shareholders – or the proxy voting agencies – that this was the right course of action.

“The committee looks forward to re-engaging with shareholders, listening to their views, and once again making the case for why discretion was used in a genuinely exceptional year which produced a genuinely exceptional performance from the executive leadership.”

Shoppers are seen with Morrison shopping bags outside a branch of Morrison supermarket

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Mr Potts received his bonus despite profits plunging £165m last year, from £435m the previous year. He was a awarded a total pay package in the year to 31 January worth up to £4.2m, including the bonus. He made just under £4m the year before.

The firm’s remuneration committee had upgraded the chief’s payout after it stripped out the cost of the pandemic when calculating whether a bonus would be appropriate.

The investor revolt comes a year after more than a third of investors voted against its pay policy for 2019-20, amid concerns over generous pension deals for Mr Potts and chief operating officer Trevor Strain.

In March, Morrisons, Britain’s fourth-biggest supermarket, reported a halving of annual profit to £201m, due largely to costs incurred during the crisis.

At the time, Mr Potts said he wore the profit fall as a “badge of honour”, as the priority during the year had been feeding the nation and keeping staff and customers safe.

In assessing pay and bonuses, Morrisons said its remuneration committee felt that management should not be penalised by the costs of the crisis. It also pointed out that Mr Potts waived a basic salary increase for a sixth straight year.

In recent weeks, cinema chain Cineworld, events company Informa and property group Savills have each suffered a shareholder backlash over pay.