In 2019, the CEO of Ocado, a British online supermarket, received a total pay packet of £58.7 million—a high amount in the U.K. market, particularly given the current political sensitivity surrounding executive pay. Of the payout, £54 million was attributed to the company’s Growth Incentive Plan (GIP), which was put in place in 2014 as a one-off award atop its existing pay structures. Shareholders approved the GIP in 2014 despite opposition by 26% of the votes, including Vanguard’s. We had voted against the plan given the lack of a compelling rationale and given our concerns about the total potential payout.
This year, our concerns about the GIP came to fruition. Although Ocado did exceptionally well over the performance period, we did not feel we could support the award given our concerns about its structure and the total payout. Therefore, we voted against the remuneration report at the company’s annual meeting.
Nearly 30% of shareholders voted as we did, and we contacted Ocado to explain our votes. As this was a one-off plan that was discontinued, it is unlikely to present ongoing issues, and we already had taken steps to engage with the company on improving its remuneration structures ahead of the 2020 annual meeting. In 2019, we engaged with Ocado twice regarding its remuneration policy, to encourage the company to make improvements to address shareholder concerns about pay outcomes.