The bosses of Wm Morrison Supermarkets PLC (LON:MRW) are to pocket £35mln if the Fortress takeover goes ahead, while they are reassuring farmers that the change of ownership will not affect the supply chain.
The grocer has accepted a 254p takeover offer from private equity group Fortress and is waiting for shareholders’ approval, after rejecting Clayton, Dubilier & Rice’s (CD&R) 230p proposal two weeks ago.
READ: Morrisons private equity takeover: a timeline
Chief executive David Potts would make £19.6mln if the board awards him shares according to long-term incentive plans. His current holding would earn him £9.2mln.
Chief operating officer Trevor Strain is set to receive £3.6mln with the potential to reach £11.5mln, while finance director Michael Gleeson’s figures are £804,565 and £3.7mln based on the same estimates.
“This would be a vastly excessive windfall, reflecting the fact that pay for chief executives of listed companies is structured in a way that wildly over-estimates their importance,” Luke Hildyard, director of The High Pay Centre think tank, told The Times.
Potts and business secretary Kwasi Kwarteng are due to meet on Friday to discuss the benefits of the deal and Morrisons’ plans.
“A suitable and appropriate owner”
The chief executive, who joined the FTSE 250 group in 2015, wrote a letter to farmers where he said Fortress’s pledges about the future of the company “carry genuine weight”, The Guardian reported. However, they are not legally binding.
“Throughout our discussions with Fortress, we considered very carefully whether Fortress would be a suitable and appropriate owner of Morrisons and whether their plans for the business would protect and develop the fundamental character of Morrisons for the benefit of all stakeholders,” Potts wrote.
The National Farmers’ Union (NFU) said Morrisons “British farming’s biggest direct customer”.
Pay revolt
Last month, over 70% of investors voted against the directors’ remuneration resolution, which had stripped out the costs of COVID-19 in calculating management bonuses.
David Potts, chief executive, is set to receive the maximum £1.7mln bonus even though profits after coronavirus costs fell to £165mln from £435mln after costs of £290mln that the grocer attributed to the virus.
Potts total pay package for the year including the bonus was £4.2mln including long-term incentives and the company’s remuneration committee said it did not feel that he should be penalised for helping the country cope with the coronavirus crisis.
Shares rose 1% to 267.05p on Monday afternoon.