Sainsbury’s chief executive Justin King saw his pay jump to £1.47 million for the year to March as his recovery plan started to reverse the fortunes of the supermarket giant.
King’s 30 per cent pay increase was accompanied by a £590,000 bonus, according to the annual report released yesterday.
Sainsbury’s turnaround strategy has delivered five straight quarters of growth in market share and like-for-like sales.
The plan led to a pre-tax profit for the year to March of £104m, compared to a loss of £238 million the previous year.
Weekly customer transactions jumped 1.5m to 16m.
Sainsbury’s market share has risen to 16 per cent from 15.8 per cent for the 12 weeks to May 21, compared to 15.8 per cent a year ago. The gain narrowed the gap with Asda, which held steady in second place with 16.4 per cent.
Tesco remained way ahead of the market with a share of 31.1 per cent.
King’s recovery strategy was launched after Sainsbury delivered four profit warnings in eight months in 2004, amid supply chain problems that led to poor availability of some products.
The plan aims to increase sales by £2.5 billion over three years to March 2008, and to cut costs by £400m.
Since the recovery plan was launched in October 2004, Sainsbury’s shares have risen 30 per cent. The stock fell 3p to 314p yesterday.
The maximum bonus to which King was entitled last year was 100 per cent of his £700,000 basic salary. Sainsbury’s is proposing to increase the maximum bonus for King’s salary to 150 per cent of his basic salary for the current financial year. A quarter of the bonus would have to be invested in company shares for three years.
The return on capital employed must hit 14 per cent and cash-flow per share jump by 18 per cent for King to receive the maximum bonus. Shareholders will vote on the new bonus scheme at the annual general meeting on July 12.
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