Sainsbury's has revealed the performance targets its agreed with Sir Peter Davis as he prepares to step up to the chairmanship of the supermarket group.
Sir Peter could receive bonus shares worth nearly £1.2 million even if he misses internal profit forecasts by 30 per cent in each of the next two years. He could be awarded up to 1.5m shares as chairman. If he meets 'soft targets' which are tied to the business transformation programme he will receive 600,000 shares. The remaining 900,000 shares are tied to undisclosed profit targets.
Sainsbury's annual report showed Sir Peter was paid £1.22m last year, a rise of 11 per cent. Sir George Bull, the group's current chairman insisted that the group has the full backing for Sir Peter's new contract from leading investors including the Sainsbury's family.
Meanwhile, the gulf between the chain and its biggest rivals Tesco seems to be ever widening.
One City analyst described Sir Peter's package as 'insensitive', especially as staff have been recently asked to make further pension contributions.