Almost a third of Ocado shareholders expressed their dissatisfaction with the £2 million pay package of the company’s chief executive, Tim Steiner, during the Annual General Meeting held on Tuesday.
In a surprising turn of events, 30.14% of Ocado investors cast their votes against Steiner’s remuneration package. The package included a salary of £755,000 and a bonus of £1.19 million, despite the fact that the online grocery retailer reported losses amounting to £500 million for the year.
Ocado’s financial performance has been impacted by declining sales, which fell by 3.8% to £2.2 billion during the reporting period. This decline can be attributed to a shift in customer behaviour away from the lockdown-induced trend of purchasing groceries online. Additionally, the ongoing cost-of-living crisis has resulted in smaller shopping baskets, further contributing to the company’s struggles.
Adding to the company’s challenges, Ocado recently announced the closure of its Hatfield fulfilment centre on April 25. This decision puts approximately 2,000 jobs at risk, further aggravating the situation.
Unfavourable market conditions have taken a toll on Ocado’s share price, which has plummeted by 45% in the past year alone. Consequently, the company currently holds the top position on the Financial Conduct Authority’s list of “most-shorted” stocks as of March 2023.
Despite the adversity, CEO Tim Steiner remains optimistic about Ocado’s recovery prospects. In February, he expressed confidence in the company’s business model, highlighting the resilience of Ocado Retail, its joint venture with Marks & Spencer. Steiner emphasized that despite higher costs and smaller basket sizes due to the Covid unwind and the cost-of-living crisis, the joint venture has managed to increase customer numbers and online market share. He further emphasized that as the effects of the Covid unwind fade and customer growth continues, the company will be able to recover its fixed costs associated with recent capacity commitments.
The significant opposition from Ocado shareholders regarding Tim Steiner’s remuneration package serves as a clear indication of their dissatisfaction with the current state of the company. With declining sales, the closure of a fulfilment centre, and a struggling share price, Ocado faces numerous challenges in the coming months. However, CEO Tim Steiner’s confidence in the company’s recovery prospects provides a glimmer of hope. It remains to be seen how Ocado will navigate these difficulties and regain the trust and support of its shareholders.
In conclusion, the revolt by almost a third of Ocado shareholders against the chief executive’s pay package underscores the growing concerns surrounding the company’s performance. The developments surrounding declining sales, the closure of a key facility, and the impact of market conditions on the share price highlight the need for strategic measures and effective leadership to steer Ocado back to a path of growth and profitability.