This largesse stems from the company’s Growth Incentive Plan (GIP) proposed by Douglas McCallum in 2014, when he chaired the remuneration committee. This, he said, would “encourage the Company’s strategy of delivering growth through expansion and monetisation of its intellectual property...” an early hint that Ocado’s strategy was to head towards the tech sector. Since progress would be reflected in the share price, he implied, it was the only performance condition needed.
Several large investors objected. Exceptional performance might influence the share price. But so would takeover rumours. Awards ought to depend not on the share price, they said, but the elements of companies’ long-term strategies within the directors’ control. The vote at the 2014 annual meeting was 27 per cent against. The directors said that they’d note the concerns – and granted Tim Steiner, the chief executive, a nil-cost option over 4m shares anyway. The share price then was 319p, making his award worth £12.7 million – not bad for someone whose salary had just been raised to £0.5 million. The catch was that to receive them all, Ocado’s share price in 2019 would have to beat the growth of the FTSE 100 on average by 20 per cent a year. It would need to triple.