Mike Coupe, the boss of Sainsbury’s has been criticised by independent shareholders over a bumper pay package he was awarded last year despite the failure of a planned merger with Asda and a slump in the share price.
“Why are you paying so much for so little?” asked John Farmer, an independent investor addressing the supermarket’s board at the company’s annual shareholder meeting in central London. “You have the gall to pay executive directors £8m a year and another £1m for the non-executives on presumption of competence we are just not seeing.”
He suggested it was time for Coupe to leave as he had “manifestly not performed” and the long-term returns for investors were “disgraceful”.
One former employee who had worked for Sainsbury’s for 25 years said the company’s share price had hit the lowest point she could remember. “That’s cost me and a lot of my friends a lot of money,” she said.
She suggested that Sainsbury’s had not invested enough in cutting prices: “I now shop in Aldi because it is far cheaper than Sainsbury’s, granted the quality might not be the same.”
Shares have been hovering at a 30-year low and were priced at 201p on Thursday, 24% lower than at the beginning of the year.
Martin Scicluna, chairman of the retailer, gave a robust defence of Coupe saying the planned Asda merger would have been a “cracking deal”. He said Coupe was a “man of great values and great integrity” and “the right guy to be serving us right now”.
Two shareholder advisory groups advised voting against Sainsbury’sremuneration report in protest against Coupe’s £251,000 pay rise to £3.9m. But more than 90% of voting shareholders backed the report on Thursday..
Pirc, the shareholder advisory firm, told investors that Coupe’s variable pay – which includes cash and share payouts – was “considered excessive” at 271.5% of salary and that his pay was “not considered acceptable” given the returns for shareholders.
Glass Lewis, another advisory group, told shareholders Sainsbury’s had failed to outline how the failed merger with Asda had affected executive bonuses.
On Wednesday, as he revealed a disappointing fall in quarterly sales, Coupe defended his pay deal saying: “My performance and the business performance is what determines the overall package,” he said. “There have been many years when year on year pay has fallen.”
