Is there any embarrassment in the Ocado boardroom for the part that supine non-executives played in sanctioning an £88m bonus for directors? It would seem not. Andrew Harrison, who chairs the remuneration committee, brazened it out in the annual report, urging shareholders to look at a different number – the 265% increase in the company’s share price over the past two years (and certainly not the £214m loss it delivered in 2019).
Tim Steiner, the chief executive, got £54m of the pot, receiving a tidy £58.7m once his salary and other bonuses are taken into account. He’s hit the jackpot twice because the surge in the share price has boosted the value of his personal stake to nearly £300m.
The bonus, even measured by the yardstick of City excesses, is obscene. It’s one of the biggest bonus payouts made by a listed UK company, only bettered by the likes of Jeff Fairburn, the disgraced former chief executive of the housebuilder Persimmon, who pocketed £75m, and Sir Martin Sorrell, who banked £70m from WPP in 2015.
Yet we are supposed to see Ocado differently these days. Think Tesla, not Tesco – well, Elon Musk’s potential $50bn pay deal provides a flattering comparison, at least. Today Ocado has successfully reinvented itself as a tech stock selling armies of grocery-picking robots to supermarkets – and says it should have Silicon Valley-style pay deals to keep its indispensable executives “motivated”.
But for many people Ocado is still the company that pulls up at their front door with bags full of Waitrose groceries. That will end this autumn when the company will attempt to switch horses to Marks & Spencer – which is paying £750m for half its UK grocery business – without falling from the saddle. So you would think the company would be more concerned about its image.
Once beloved of the middle classes, Ocado is facing incoming fire from parents and teachers opposed to its plan to open a distribution hub – complete with diesel fuel pumps – yards from their north London primary school. The company, which has been trialling electric vans in high-density areas, has said it will replace all the diesel vans if it can get a power upgrade at the site. Maybe the best part of the £100m that executives have pocketed would have been better spent on greening its fleet?
The annual report shows that Steiner’s pay was more than 2,600 times that of the median employee, who all-in gets £22,500. As part of the preamble, the company highlights that executive pay is “more at risk than wider employee pay due to the use of variable pay” and without the mega bonus the multiple would only have been about 200 times. The icing on the cake was the decision to raise the basic salaries of the four executives who shared the £88m jackpot; this year Steiner will have to drag himself out of bed for a guaranteed £720,000 salary.
Which brings us back to Waitrose, part of the employee-owned John Lewis Partnership, where staff in good years are paid the same rate of bonus as top executives. Once Ocado shifts over to M&S, shoppers will have to make a conscious decision to move away from their familiar service to Waitrose’s own website. As a shopper, all you can do is vote with your feet.
BP promises action on climate, but we’ve heard it before
The US environmentalist and author Bill McKibben famously warned that in the race to tackle the climate crisis, winning slowly is the same as losing. Last week BP only barely found its feet in the starting blocks – again.
Almost 23 years ago, BP’s chief executive at the time, John Browne, became the first oil boss to publicly accept responsibility for the looming climate crisis. In a landmark address at Stanford University he promised “substantial, real and measurable” action from the UK oil giant. On the top of his list was a pledge to control BP’s own emissions. But almost a quarter of a century later, the world is still waiting.
Browne was in the audience in London on 12 February at a London hotel conference room as his former protege and BP’s new chief executive, Bernard Looney, set out a new target for the oil industry’s climate ambitions. He one-upped Browne’s vow to cut carbon emissions by setting an ambition to reduce and “neutralise” enough greenhouse gases to turn BP into a carbon-neutral company.
The 21st-century version of BP’s green turn may have relied more heavily on slick video production and branded graphics, but the pledges share a worrying parallel: neither set out how BP would achieve the grand goals set for the middle of this century.
And so, the world has been asked to wait a little longer. Investors must wait until September to learn how Looney plans to make his green vision a reality. The net-zero revolution itself is a 2050 target, meaning another quarter of a century will pass before the company intends to meet it.
Looney’s address acknowledged that people would be impatient for detail, and many others would never be satisfied that BP is going far enough, fast enough. On this point, at least, he is wholly correct. He is already on borrowed time.
All bets are off as the government cracks down on gambling again
For anyone looking to invest their life savings, the gambling industry is hardly a tantalising prospect. Public unease about the industry, following criticism over its failings in dealing with problem gamblers, has reached boiling point.
The Gambling Commission, the UK regulator, has begun flexing its muscles. It has already banned bets on credit cards, and promised to review a proposal by MPs that would see online casino stakes cut to £2, bringing web-based casino games into line with fixed-odds betting terminals. Betting shares duly tanked as investors digested the prospect of decreased revenues.
Bookmakers fought tooth and nail to save FOBTs, only to emerge utterly defeated by a ragtag coalition of ex-addicts, MPs and rivals in the casino and amusement arcade business. With that defeat fresh in the mind, betting firms now fear the same treatment will be meted out to their lucrative online operations. The stakes have never been higher.
Where once the industry dismissed concerns about problem gambling and sought to discredit its opponents, the newly formed Betting and Gaming Council has preferred the tactic of deflection.
What about unauthorised overseas gambling sites, they ask. What about the role that banks and big tech companies can play in reducing harm? Most of all, the BGC points to the voluntary steps taken by the industry to address public problem gambling, including reining in advertising. Such olive branches, of course, were offered only after the industry found itself staring down the barrel of a gun.
Now the government is reviewing the Gambling Act and has a once-in-a-generation chance to introduce precise, well-informed legislation.
Cutting stakes to £2 would not be a cure-all. Limits may have a role in addressing gambling disorders but so do things like curbing the speed of play and robust affordability checks. Whatever the outcome, the odds are short on the sector emerging smaller and less profitable.
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