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Rebuke for UK’s Morrisons as investors reject pay report

LONDON (Reuters) -Morrisons shareholders overwhelmingly rejected the British supermarket group’s pay report on Thursday in the latest investor protest against rewards for top executives.

More than 70% of votes cast at the company’s annual general meeting (AGM) rejected the remuneration report, although the vote was advisory and so not binding.

Investors have become more vocal in their opposition to boardroom pay deals they deem excessive amid society’s broader struggles in the pandemic.

Ahead of the AGM, several investor advisory groups had recommended shareholders vote against the report because the way Chief Executive David Potts’ pay package was calculated meant it was unaffected by a COVID-19-driven profits slump.

Morrisons said 70.12% of votes cast were against the resolution to approve the report, while 29.88% were in favour.

In March, Morrisons, Britain’s fourth biggest grocer, reported a halving of annual profit to 201 million pounds ($283.5 million) due largely to costs incurred during the crisis.

At the time, Potts said he wore the profit fall as a “badge of honour” as the priority during the year had been feeding the nation and keeping staff and customers safe.

Potts made 4.2 million pounds in the year to Jan. 31, 2021, including an annual bonus of 1.7 million pounds and a long-term incentive plan of 1.4 million pounds. He made just under 4 million pounds the year before.

Morrisons said its remuneration committee felt that having been instructed to feed the nation management should not be penalised by the costs of the crisis. It also pointed out that Potts waived a basic salary increase for a sixth straight year.

It said it was a matter of “sincere regret” to the committee that it had not been able to convince a majority of shareholders, or the proxy voting agencies, that exercising discretion was the right course of action.

“The committee looks forward to re-engaging with shareholders, listening to their views, and once again making the case for why discretion was used in a genuinely exceptional year which produced a genuinely exceptional performance from the executive leadership,” it said.

The AGM, held at Morrisons’ headquarters in Bradford, northern England, was not attended by investors, who voted by proxy because of coronavirus restrictions.

($1 = 0.7091 pounds)

(Reporting by James Davey. Editing by Sarah Young and Mark Potter)

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