Investors revolt over pay at Reckitt Benckiser and Ocado

A new wave of shareholder activism is building after investors in some the country’s best-known companies showed their disapproval over boardroom pay.

Consumer goods giant Reckitt Benckiser suffered the biggest revolt of the day on Wednesday with more than one in three investors actively voting against the executives’ remuneration report at the Dettol to Nurofen maker. A further one in five voted against the FTSE 100 company’s forward-looking remuneration policy.

Online grocery business Ocado also felt shareholders’ ire, with one in five going against its remuneration report and almost one in eight voting against the remuneration policy.

Both sets of data represent investors actively voting against levels of pay and bonuses, and do not include abstentions, where shareholders do not feel strongly enough to vote down a measure but do not back it either.

The revolts come just over a fortnight after investors in blue-chip companies AstraZeneca and Barclays voted their concerns over pay, echoing the so-called “shareholder spring” that caused upheaval in boardrooms two years ago.

A spokesman for Reckitt Benckiser said: “We continue to engage in dialogue with our shareholders so that we can either address their concerns or explain why we believe the policy is the right one.”

It is understood that ahead of the annual meeting Reckitt Benckiser held talks with shareholders who expressed concerns about how clear the company’s bonus structure was. These worries will be reflected in the next annual report.

Ocado shareholders appear to have been concerned by the FTSE 250 group’s five-year “growth incentive plan” (GIP) , which could deliver shares currently worth £18m to chief executive Tim Steiner if the company meets targets. These include boosting the shares from the current price of 311.3p to £14.11, growth which would put the company into FTSE 100 – as well as delivering an £80m-plus payout to Mr Steiner.

Ocado stressed that to hit the targets to deliver such bonuses, the company would have to outperform the FTSE 100 index by 20pc a year.

An Ocado spokesman said: “We have made changes to Ocado’s remuneration policies this year in order to retain and incentivise the senior team through what will be a crucial period in the group’s future. There is huge growth potential in online grocery and Ocado is uniquely placed to benefit from this.

“The introduction of the GIP serves the additional purpose of incentivising the key executives of the company to deliver exceptional performance in the context of the unique strategic opportunities that Ocado has created for itself. Executives will only benefit if truly exceptional performance is delivered and significant value is created for shareholders.”

By contrast, BAE fared better with investors. Sir Roger Carr, the defence group's newly installed chairman, told the annual meeting ahead of the final votes being cast that the bonus structure which seemed to indicate it could theoretically deliver bonuses of 1,000pc was misleading and should have been altered. He added that yesterday’s ballot was effectively “voting on stopping that” after being quizzed by a shareholder on the matter.

BAE secured almost 93pc support for the resolution accepting the company's long-term incentive plan.