Ocado chief executive Tim Steiner lined up share bonuses potentially worth more than £26m last year as the company recorded its first profit.
In January 2014, the former Goldman Sachs banker, who co-founded Ocado in 2000, was granted a beneficial interest in 2.5m shares. The stock vested under a scheme in which Ocado’s four founders invested £1m of their own money with the potential to collect 30 times that if Ocado’s share price doubled.
Steiner’s interest in the last of four tranches of 2.5m shares handed him a paper profit of £5.5m on the latest tranche, according to the company’s annual report, filed on Thursday. Those shares are worth £9.82m at the latest share price.
The other co-founders, Jason Gissing and Neil Abrams, also collected beneficial interests in Ocado shares under the scheme, which was designed to tie them in to the business for four years. Gissing’s interest was worth £3.7m in January and Abrams’ £2.27m. Steiner could also collect up to 4.7m shares under two long-term incentive schemes which kicked off last year. The majority of those, 4m, relate to a one-off award approved by shareholders last year.
Steiner will collect all of them only if Ocado’s share price outperforms the FTSE 100 by 20% over the next five years. He will get a quarter of them if the company achieves the minimum target of outperforming the FTSE by 5% by 2019. On top of that, Steiner could notch up a further 174,588 shares, equivalent to twice his basic salary last year, if he hits revenue and earnings-per-share targets over the next three years.
Steiner earned a basic salary of £559,000 after a 22% pay rise last year and an annual bonus of £385,000, just over half the amount potentially possible. The cash bonus was down 27% on 2013 as Ocado missed stretching targets based on sales, underlying profits and strategic objectives.
When Ocado announced it had made a profit of £7m earlier this month, Steiner said this had not been its aim. “We’re not sitting here popping open the champagne,” he told the Guardian. “We may or may not [book a profit this year]. It’s not our primary focus to make short-term profit. We are focused on long-term shareholder value.”
Gissing lost out on his annual cash bonus altogether after leaving Ocado last spring. But the retailer’s annual report shows that the director, who retains a 2.6% stake in Ocado worth £59.4m, left with a consolation prize of his staff discount – with no apparent time limit.
