Generous pension deals enjoyed by CEO David Potts and COO Trevor Strain were a source of contention, as investors voted against the pay policy in its shareholder meeting on Thursday. More than a third — 35 percent — of investors revolted.
The policy would see pension contributions for both executives continuing at 24 percent of salary in the current financial year.
However, these are expected to adjust downwards in following years.
Mr Potts cashed in a £4.2million pay packet last year alongside a £2.3million long-term share bonus.
It is a slight decrease on the year before, where Mr Potts banked £4.5million.
Meanwhile, Tesco head Dave Lewis received £6.4million.
The sum raised eyebrows, but compared to Mr Potts he runs a larger business with around 6,800 shops in 2019.
In the 2018/2019 financial year, Tesco’s annual revenue amounted to almost £52billion in the UK and Ireland.
While Morrisons’ revenue was recorded at £17,735 million, according to the firm’s annual report.
UK corporate governance code says pensions contributions should be in line with the rest of the workforce, however the majority of those on the shop floor receive just five percent.
Investor advisory group ISS opposed the policy, while others such as Glass Lewis backed it up.
Morrisons said in a statement: “Although the policy vote passed, and we received considerable positive feedback during consultation, the board acknowledges a number of shareholders decided to vote against the policy.”
At the meeting, shareholders also voted against the reelection of Belinda Richards as a non executive director. A fifth of shareholders wanted her out.
The supermarket chain issued a statement of support, saying: “The board strongly supports Belinda’s re-appointment to the board, and throughout her tenure she has demonstrated her commitment to the company and ability to dedicate sufficient time to her duties.”
The company said the revolt was driven by groups of investors who applied a more stringent voting policy on directors’ external commitments.
Mrs Richards holds a number of other roles including one at software giant Avast. She is a former corporate partner at Deloitte.
The annual meeting was held at a social distance, with investors voting by proxy due to the COVID pandemic and lockdown.
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Executive pay is a particularly thorny topic in the current climate, where one in 10 people could face job losses due to an economic downturn.
Supermarket workers are on the front line of the coronavirus pandemic, while executives stick to back of house.
Supermarkets’ conduct has come under the microscope during the pandemic as a business rates holiday brought in by the government has saved them millions at a time when they have been raking in extra business.
This week it was announced that Ocado would move to expand due to increased demand, launching a £1billion fundraising round.
Ocado’s shareholders also recently voted against executive pay rises and bonuses.
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