Sainsbury’s board braces for investor anger over failed Asda deal

Sainsbury's board
// Sainsbury’s to hold its first public investor meeting since its failed merger with Asda
// Meeting will take place during AGM on Thursday
// Shareholder anger expected as shares fell to 30-year low in May and amid controversy on executive bonuses

Senior executives and board directors at Sainsbury’s are bracing themselves for shareholder anger this week, as the Big 4 retailer hosts its first public investor meeting since its failed merger with Asda.

The grocery giant’s AGM on Thursday will also be the first chance for new chairman Martin Scicluna to explain why he thinks chief executive Mike Coupe remains the best person to lead Sainsbury’s into the future.

Shares at Sainsbury’s fell to a 30-year low in May after the CMA struck down the proposed £12bn merger with Asda.

Scicluna has already said he supports Coupe despite the failed deal, but shareholder advisory groups have expressed concerns over bonuses, especially with the falling share price.

Advisory body Glass Lewis said: “The committee have failed to outline the impact, if any, of the failed deal on the bonus outcomes of the executives, particularly in light of share price performance as a direct result.”

Coupe has been awarded a £3.9 million pay packet this year, including a bonus, but shareholders will need to vote it through on Thursday.

The day before the AGM, Sainsbury’s will update the stock market with its first-quarter results.

Analysts are predicting a fall in sales across all three divisions of food, general merchandise and clothing.

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  1. ‘Basic’ executive pay is typically benchmarked by a renumeration committee who look at the ‘market rate’ across similar (and other) sectors. So if they benchmark against, say Steve Rowe at M&S (48% pay rise this year despite fall in sales and store closures), Dave Lewis at Tesco (whose pay ‘fell’ to £4.6m after he said he was sensitive to ‘high pay’ concerns) and then look outside the retail sector to, say, Unilever (£10m) and Persimmons (£75m), £3.9m starts to look tiny.

    I have no problem with executive pay levels in general when a business is doing well – any of us who run our own businesses to some extent want to reap the benefits of our hard work, and if we say otherwise is to some extent hypocrisy. But in Coupe’s case it seems to be a case of ‘heads I win, tails you lose’. There doesn’t seem to be any consequences for failure for these people. How is that not systemic failure, and the original definition of corruption: the process of decay; putrefaction. Rotten in other words.

  2. Minimum wage is just over £8 an hour in the UK. Zero hour contracts exist and to an awful extent. Some people find it hard to find the hours they need and enough money to live.

  3. Yes and not the first time he has done it either – check his history at Iceland – good commercial director , never a CEO


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