The Ocado bonus scheme has provoked a backlash from campaigners, who say that the pay is too high.
Dan Howard, head of the workplace inequality campaigning organisation Good Work, explained that Ocado’s pay policy meant that it lagged behind other retailers such as Tesco’s, Sainsbury’s and Marks & Spencer, all of which have committed to paying staff the real living wage as a base rate.
He said: “Ocado has been talking about addressing low pay for five years but has yet to make a long-term commitment. We’re calling on the board to pay the real living wage. This would make a significant difference to the lives of hundreds of its lowest-paid workers.”
In February 2024, leaders of M&S announced a new retail pay offer, which allowed 40,000 customer assistants to receive £12 per hour, up from £10.80.
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Ocado leaders have sought permission from its stakeholders to change its pay plan. Its current plan is set to come to an end this year.
Under the new package, Steiner could receive as much as 1,800% of his £824,570 base salary from 2027.
The bonus is dependent on Ocado’s share price rising to £29.69 in three years’ time, and improved cash flow; if this goal is missed then Steiner would be set to receive up to 600% of his base salary, or almost £5m.
Shareholder advisory group Glass Lewis had urged shareholders to reject the new pay package. A representative stated: “We remain concerned about the potential for excessive remuneration.”
Jenny Winstanley, head of HR consultancy at employment and HR firm AfterAthena, said that HR is responsible for advising businesses about moral concerns that could arise when setting bonuses.
She said: “It's often ultimately not the responsibility of HR to issue bonuses, however it is HR's responsibility to advise the business of wider considerations, such as the moral, ethical and internal and external factors in play when issuing bonuses in the absence of general pay rises to employee wages.”
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Andrew Speke, spokesperson for thinktank the High Pay Centre, said that big pay packages are a result of competition for talent. “If pay is too low, companies may not be able to attract talent capable of successfully taking on leadership roles," he added.
“HR could balance distribution for C-suite leaders and employees, firstly by ensuring that workers have a strong voice within companies – allowing workers access to unions and including worker representation on boards.
“Beyond this, HR could push for remuneration policies to be reformed to include leaders and employees within one overall remuneration setting process.
“The separate pay-setting processes for leaders and the wider workforce is one of the main factors which reinforces often extreme differences between the pay of workers and leaders.”