J Sainsbury PLC (LSE:SBRY) and Marks and Spencer Group PLC (LSE:MKS) are expected to face fierce criticism over wages of both bosses and staff this week but for completely different reasons.
Both companies have been embroiled in shareholder disputes after refusing payment guarantees to employees while simultaneously handing out bumper pay packages to senior executives.
M&S shareholders will vote tomorrow on whether to approve a £1.6mln bonus payout to its former chief executive Steve Rowe, which was more than the departing executive's annual wage package.
The retailer cancelled its dividend last April in a bid to preserve cash after the coronavirus pandemic struck, failing to provide guarantees on when it would be reintroduced.
Sainsbury's meanwhile faces renewed protests at its annual general meeting on Thursday, which will be held at its headquarters in Holborn, where shareholders will vote on top-level wage increases alongside its refusal to guarantee staff the living wage.
Investors in Sainsbury's will vote on a resolution put forward by shareholders this year calling for the supermarket chain to become a living wage accredited employer.
There was uproar among Sainsbury's shareholders after the supermarket refused to become an accredited living wage employer this year, despite its chief executive Simon Roberts receiving a £3.8mln pay and bonus packet for the year to March that was triple his wages in 2021. Shareholders will vote on, among a raft of other resolutions, the Sainsbury's remuneration report.
Sainsbury’s chairman Martin Scicluna said in May that the supermarket chain had held a “constructive and open dialogue” with ShareAction, the campaign organisation that coordinated the resolution, and several of its shareholders.
He said unequivocally that the supermarket’s board does support the shareholder resolution, outlining that wages represent the supermarket chain’s biggest single operating cost, costing Sainsbury's more than £4bn a year.
Sainsbury's argues that becoming an accredited provider of the living wage would require an outside organisation to set employee wages.
Accreditation would require a third party called the Living Wage Foundation to decide on staff pay rises each year and require the supermarket to pay third-party contractors the living wage.
“The board does not support the shareholder resolution (Resolution 21)," Scicluna said in a statement in May, adding that since 2017 Sainsbury's had increased the pay of front-line employees by 25%.
Shareholders that have pledged to vote in favour of the resolution include Aviva PLC (LSE:AV.)'s asset management arm, Coutts & Co, the Coal Pension Trustees and Global Systemic Investors.
ShareAction said the motion was backed by asset manager Legal & General Group PLC (LSE:LGEN) and workplace pension scheme Nest, together with 108 shareholders and ministers and barristers.
On Friday, shareholder representatives Organise and 38 Degrees met at the Sainsbury’s headquarters to lodge a petition with 102,764 signatures from the public calling for Sainsbury’s to become accredited as a living wage employer, together with a report on the company’s working conditions.
Sainsbury’s employees were quoted in the report as struggling to make ends meet amid the building energy crisis and ongoing cost-of-living crisis.
One anonymous member of staff said they couldn’t afford to have the heating on this year, while another called on their employer to help them “survive through the storm”.
"Struggling to make ends meet was hard enough, now it’s impossible,” one anonymous member of staff said.
After the resolution was proposed, Sainsbury’s said it would lift pay for London staff in April, meaning all staff directly employed by the company would earn the real living wage.
Despite this, ShareAction said the resolution remains on the ballot “as important gaps remain”, for example the supermarket has not extended the commitment to subcontracted staff such as cleaners and security guards.
“Without accreditation there is no commitment direct employees will continue to earn a wage that meets the cost of living,” it said.