Advisory firms ISS and Glass Lewis recommended Morrisons’ shareholders vote against the supermarket’s pay report at the annual meeting on June 10 after the board adjusted the criteria for bonuses because of a surge in Covid-related costs, according to the Sunday Times.
The newspaper reported that Morrisons stripped out £290m of costs when calculating bonuses for chief executive David Potts chief operating officer Trevor Strain and chief financial officer Michael Gleeson. The trio’s bonuses equated to 200 per cent of salary, which is the maximum, the paper said.
Mr Potts, who has waived salary rises for six years, earned £4.2m last year after a £1.7m bonus, according to the Sunday Times.
Mr Higginson said he strongly disagreed with the position the voting agencies had taken, adding: “We have considered this properly in the round and the management team earned their bonus this year.”
A Morrisons spokesman told The Yorkshire Post: “The committee felt that having been instructed to feed the nation - and in doing so endured a year of effort like no other - management and all store managers should not be penalised for their outstanding performance or for taking the steps necessary to protect colleagues and recognise their hard work.”
The Morrisons’ spokesman stressed that David Potts waived his pay increase for the fifth year running and the average colleague bonus was tripled “to reflect the hard work, sacrifice and resilience needed to feed the nation”.
The spokesman added: “The committee has tried to balance fairness, effort, talent and outcomes in circumstances that could never have been envisaged."
The spokesman also highlighted the fact that Mr Potts and Mr Strain both waived 20% of their bonus two years ago when they didn't believe the performance of the business warranted it.
The spokesman stated that, with regards to the top three executives, the remuneration committee exercised discretion on annual bonus "in an exceptional year where they have done a great job under great strain" .