Supermarket sweep

Supermarkets have been the Covid-19 success story enjoying surges in sales of as much as 50% as millions of shoppers filled their cupboards with pasta and bulk bought toilet roll. At the same time, food retailers have enjoyed a business rates holiday saving them millions of pounds in outgoings.
What then to do with all this surplus cash? Morrisons’ solution is to give chief executive David Potts and chief operating officer Trevor Strain a 24% pension contribution. However, this might lead them into a rather awkward confrontation with shareholders since such a move would be in direct opposition to the 2018 corporate governance code which says executives’ rates be aligned with those offered to workers. In this case Morrisons staff get a slightly less generous 5% contribution. The AGM will take place on June 11th.
Over to Tesco, where full year profits are expected to exceed last year’s £1.56bn by £300m. Not a bad legacy for outgoing CEO Dave Lewis who one would hope will be rewarded for all his hard work. Lewis is not calling for extra pension contributions; in fact he shuns a retirement fund completely, instead taking a cash payment of 25% of his £1.25m salary. Tesco workers meanwhile get a 7% contribution into the workplace scheme.
Lewis is also holding out for a performance-related bonus which he may have been denied had rival Ocado not been removed from the benchmark against which Tesco’s success was measured. And in earlier alerts we have covered the dogged persistence of Ocado bosses to protect huge bonuses from shareholder scrutiny.
The supermarkets may well be raking it in during lockdown but if their boards fail to read the room and pocket the profits at workers’ and customers’ expense, their success story could soon have a less than happy ending.

Leave a Reply

Your e-mail address will not be published. Required fields are marked *