Ocado chief Tim Steiner paid £59m despite record loss

Ocado chief Tim Steiner paid £59m despite record loss

The top five executives at Ocado are to share an £88 million payday, despite the online retailer suffering a £215 million loss in its last financial year.

Ocado revealed yesterday that its management team would receive the maximum possible from a five-year incentive scheme set up in 2014 because of the rise in the company’s share price.

Tim Steiner, 50, chief executive, will be paid £58.7 million for the year to December 1, 2019, one of the largest annual payouts for a FTSE 100 boss.

Duncan Tatton-Brown, 54, the chief financial officer, will be paid £15.8 million, as will Mark Richardson, 55, Ocado’s chief operating officer. Luke Jensen, 53, the chief technology officer, will receive £8.55 million and Neill Abrams, group general counsel, will receive £1.8 million.

The payout to Mr Steiner and his colleagues is likely to spark an outcry among high pay campaigners. A decade ago Bart Becht, then boss of Reckitt Benckiser, the consumer goods group, collected £90 million, but since then City institutions have become more vocal in opposing excessive payouts.

In November 2018 Jeff Fairburn was sacked as chief executive of Persimmon, the housebuilder, after an outcry about his £75 million bonus.

Ocado was founded in 2000 by Mr Steiner, Jason Gissing and Jonathan Faiman, three former Goldman Sachs bankers. It has turned a profit three times, but its valuation has soared on the back of its transformation from an online delivery service for Waitrose into a technology company with a string of licensing deals to build robotic warehouses for retailers in the United States, France, Japan and Australia.

It sealed a lucrative £750 million joint venture with Marks & Spencer to deliver groceries.

Mr Steiner, the only founder to remain with the business, has likened it to an “18-year overnight success”. Ocado now has a market value of £8.9 billion. Its shares are up 33 per cent over the past year and have more than trebled compared with where they were five years ago.

However, Ocado has divided the City between those who believe the loss-making business is overvalued and others who are evangelical about its potential to modernise retailing in an internet age.

Ocado reported a pre-tax loss of £215 million in its annual results, published yesterday, up from £44 million the previous year because of the impact of a fire at its warehouse in Hampshire.

Clive Black, an analyst at Shore Capital, said: “If economies and the stock market were valued on the basis of combined losses on huge investment and value destructing capital returns that Ocado has delivered, then we would all be flocking to Buenos Aires.”

Mr Steiner’s payment is a dramatic increase on his £4 million in the previous year because of the payout from the “growth incentive plan”.

Ocado fire
Annual losses have quadrupled for Ocado because of the financial impact of a fire that destroyed its robotic warehouse in Hampshire.

Ocado’s remuneration committee states in its annual report that the plan was meant to provide an incentive to focus on key strategic drivers and the delivery of exceptional growth and shareholder returns.

In order to trigger the payout, Ocado’s share price growth had to exceed the FTSE 100’s growth by 20 per cent a year. During the period Ocado’s share price growth was 31 per cent per year, compared with the more sluggish 1.79 per cent growth of the leading share index.

The company said that delivering shareholder returns worth £7.47 billion “demonstrates clearly that the outcomes were fair” in regards to the top directors’ £87.5 million payout.

However, the company suffered a mini-rebellion by investors over pay at its annual meeting last year, with about a quarter of those who voted opposing its remuneration policy and report.

Ocado’s latest report says that shareholders were unsatisfied about the level of disclosure surrounding its incentive targets.