J Sainsbury PLC (LON:SBRY) shareholders have backed the re-election of chief executive Mike Coupe and his £3.9mln pay package despite criticism over the supermarket group’s recent performance.
Coupe, which has come under fire over the failure of a planned merger with Asda and a decline in the share price, was re-elected by 99.5% of shareholders at the annual general meeting (AGM) on Thursday.
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More than 90% of shareholders supported the company’s remuneration report, which included a £251,000 pay rise for Coupe.
That comes despite two advisory groups, Pirc and Glass Lewis, telling shareholders to vote against Coupe’s pay rise.
Pirc said Coupe’s pay was “considered excessive” and “not considered acceptable” given the returns for shareholders.
Glass Lewis said Sainsbury’s had failed to tell shareholders how the botched merger with Asda had affected executive bonuses.
Sainsbury’s was forced to abandon the £7bn merger with Asda after the UK Competition and Markets Authority blocked the deal.
Investors are waiting to hear about the next steps Coupe plans to take to revive the business and improve shareholder returns.
Coupe suffers bruising AGM
At Thursday’s AGM, Coupe was lambasted over the group’s recent lacklustre performance.
Independent investor John Farmer criticised the group over executive pay at the AGM.
“Why are you paying so much for so little?” he said.
“You have the gall to pay executive directors £8mln a year and another £1mln for the non-executives on presumption of competence we are just not seeing.”
He also suggested Coupe should step down as he had “manifestly not performed” and the long-term returns for investors were “disgraceful”.
Chairman defends Coupe
Chairman Martin Scicluna defended Coupe, saying the planned Asda merger would have been a great deal if approved.
He said Coupe was a “man of great values and great integrity” and “the right guy to be serving us right now”.
Scicluna indicated that the weakness in Sainsbury’s share price was a result of investors’ reluctance to buy shares in retailers and domestic British companies amid Brexit uncertainty.
On Wednesday, Sainsbury’s reported a 1.6% drop in like-for-like sales for the first quarter, blaming poor weather.
Sainsbury’s has also been up against tough competition as the company, along with the rest of the UK’s biggest supermarket chains, continue to lose market share to German discounters Aldi and Lidl.