More than 70% of shareholders at the AGM of Bradford-based supermarket giant Morrisons on Thursday voted against the company’s directors’ remuneration report.
Morrisons called the vote a “matter of sincere regret.”
However, the vote is advisory and not binding.
Morrisons said: “We note the very significant majority vote against the Directors’ Remuneration Report.
“In consultations with shareholders ahead of the AGM, the Remuneration Committee endeavored to explain the full context around its decision to apply selective discretion on some aspects of the executive directors’ remuneration, in particular adjusting for direct Covid costs.
“An adjusted profit number was also used to calculate the final ordinary dividend payment of 5.11p which, together with the interim dividend and the deferred special dividend from the prior year, took the total dividends for shareholders for the year to 11.15p.
“In the Committee’s view, Morrisons performed exceptionally well for the nation during the first year of Covid with the executives widely recognised for their leadership, clarity, decisiveness, compassion and speed of both decision making and execution.
“Almost overnight, the entire business was effectively re-positioned to feed the nation and to make sure no-one was left behind …
“In addition, all Morrisons colleagues had their bonus significantly enhanced – the average bonus was trebled and paid early – to recognise their extraordinary commitment, innovation, selflessness and hard work to feed the nation in a time of national crisis.
“In the view of the Committee, the executives demonstrated those same qualities and in doing so helped to develop a more trusted, differentiated and resilient business which is in the long-term interests of shareholders.
“The Committee also noted that the Chief Executive waived his salary increase for the sixth year running.
“In these circumstances, the Remuneration Committee believed that it was appropriate to apply some discretion to the remuneration of the senior executives.
“It is a matter of sincere regret to the Committee that it clearly has not been able to convince a majority of shareholders — or the proxy voting agencies — that this was the right course of action.
“The Committee looks forward to re-engaging with shareholders, listening to their views, and once again making the case for why discretion was used in a genuinely exceptional year which produced a genuinely exceptional performance from the executive leadership.”
Further, a resolution on “general authority to allot shares” was opposed by 21.16% of shareholders.
“This is primarily driven by the votes from a small number of institutional shareholders who applied a more stringent voting policy on the allotment of shares resolution than is market practice,” said Morrisons.
“We will be engaging with these shareholders to understand their views and will carefully consider the flexibility that we seek as part of the Board’s decisions for the 2022 AGM.”