Mike Coupe, the boss of Sainsbury’s, enjoyed a 86% rise in his annual pay package to £2.8m last year despite a fall in underlying profits.
The supermarket chief executive’s pay was boosted by a £767,000 bonus, his first as head of the company after he missed out in 2015, according to the company’s annual report published on Friday.
Coupe received an annual salary of £916,000, a long-term share bonus of £806,000 which he will not be able to cash in until 2018, and benefits of £38,000 including a one-off £21,160 payment for “costs incurred as a result of company commitments”. Sainsbury’s declined to reveal exactly what the special benefit payment was for.
Sainsbury’s said Coupe had earned the annual bonus, which was 76% of the maximum possible, after hitting profit, sales and customer service measures as well as personal targets including accelerating the move into online sales by securing a £1.4bn deal to buy Home Retail Group, the owner of Argos.
The company’s remuneration committee said in the annual report: “The committee acknowledges the absolute year-on-year decline in profit and [underlying] sales but is comfortable that the targets were robustly set, particularly when the broader context of the retail market and Sainsbury’s outperformance of our main supermarket peers is considered.”
The revelations on Coupe’s pay come after Sainsbury’s revealed a 14% drop in underlying annual profits to £587m in the year to 12 March as it was forced to slash prices to compete with the rise of the discounters. Sales fell 1.1% to £25.8bn in the year. But including one-off items such as property profits and write-downs, Sainsbury’s returned to the black with a profit of £548m, after a £72m loss last year.
Shop floor staff were handed a 4% pay rise last year – but there have also been hundreds of redundancies as the retailer cuts costs as part of its fightback against the rise of discounters Aldi and Lidl.
For the coming year, Coupe and Sainsbury’s finance director, John Rogers, have been handed a 1.5% rise in basic salary to £929,486 and £685,125 respectively.
Last July, Rogers’ salary was increased to £675,000 from £610,500, after his responsibilities were broadened to include group strategy, Sainsbury’s online store and its nascent joint venture with discounter Netto.
His total pay package rose 70% to £1.8m as he secured a £472,000 annual bonus and a £486,000 deferred share bonus that cannot be cashed in until 2018. He also took home £17,000 in benefits, including a car allowance.
Sainsbury’s board has decided to delay setting targets for directors’ bonuses in the year ahead until after its anticipated takeover of Home Retail Group is completed.
- This article was amended on 5 June
