Sainsbury’s shareholders are being urged to oppose a controversial pay and bonus deal for chief executive Justin King, to be proposed at the retailer’s agm later today.

The board raised his pay partly to persuade him to stay on board after the failed takeover approach by CVC, the private equity group, this year. If Sainsbury had been taken under private control, it is likely King would have been offered a far more lucrative deal.

Pirc, the corporate governance lobby group, said that it was concerned about the “potentially excessive” rewards on offer to King and other executives following the rejection of the £11 billion bid.

Under a long-term incentive plan, King has been offered shares worth 62.5 per cent of his salary (£531,000) compared with 45 per cent last year. The remuneration committee said that this was because of the “exceptional circumstances surrounding the company this year following the conditional approach by the CVC consortium”.

But Pirc has stated that increased incentives offered to directors were not coupled with sufficiently high performance targets.

King’s contract also includes a payout worth 175 per cent of his salary (£1.5 million) if there is a change of control at the group.

Pirc is also due to recommend today that shareholders abstain on the re-election of Mr King as a director.

Sainsbury's has said King’s salary, which increased by 17 per cent to £850,000 this year, has fallen behind the average for his peer group.

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