Spotlight falls on Ocado boss Tim Steiner’s £100m in payouts | Ocado

Analysis showed Ocado’s boss has raised nearly £100 million since the online grocery company floated on the stock exchange in 2010, despite the share price currently hovering below its IPO level.

Former Goldman Sachs trader Tim Steiner, who founded the British tech company in 2000, is thought to be in talks about Ocado’s future after it emerged he was approaching at least one potential replacement.

Analysis of Ocado reports by the High Pay Center showed Steiner received payments of £94 million, including share awards, the value of which is likely to have changed since then. Campaigners said the figure raised “serious concerns about proportionality, accountability and fairness” in the payment determination process.

Steiner’s payouts for 2019 include around £59 million, largely thanks to a series of deals to sell its grocery picking technology to foreign supermarkets.

Paddy Goffey, head of research at the High Pay Center campaign group, said: “Tim Steiner’s pay trajectory illustrates a wider problem in the UK’s broken executive pay framework: pay is increasingly shaped by unregulated, large rewards rather than being linked to actual performance.

“The figure of £59 million in 2019 reveals that incentive structures can create excessive increases in wages that are difficult to reconcile with company performance or improvements in working conditions and wages for employees.

“This raises serious concerns about proportionality, accountability and fairness in the payment determination process.”

Steiner co-founded the food distribution group in 2000 and led its initial public offering on the stock market 10 years later. A passionate advocate for business, Steiner has led the company through major deals with Morrisons and Marks & Spencer and recently a tie-up with Asda, but has also faced shareholder unrest over pay packages.

Sky News reported last weekend that Ocado’s board had approached Niklas Heuveldop, chief executive of Vonage, part of Swedish telecommunications group Ericsson. It is not yet clear whether Heuveldop is a preferred candidate for the role or how far along Ocado’s board is in its succession planning.

The company, which sells software and equipment to support online grocery shopping, said earlier this week that its “chief executive officer and board continually engage in long-term succession planning and communicate regularly with potential candidates.”

Sources close to Ocado said the process was likely initiated by Ocado’s relatively new chief executive, Adam Warby, who was appointed in December 2024 and previously headed headhunter Heidrick & Struggles for five years.

Sources believed the search was quietly launched without consulting Steiner as Warby felt pressure to act amid a slump in Ocado’s share price.

Major shareholders and the board may be divided on whether he should go, multiple sources said.

Shares in the sector have fallen this week following news of a potential exit, falling as low as 172p, below the volatile price of 180p in 2010. Ocado has more shares today than in 2010 and the company is valued at around £1.4bn, compared to £720m at the IPO, but the new issues will have diluted the stakes of many shareholders.

Shares have fallen more than 90% in the last five years, reaching almost £28 during the Covid pandemic, when Steiner suggested households were permanently turning to buying their groceries online.

That optimism was short-lived when Ocado’s major US partner, Kroger, announced last November that it would close three warehouses using the British company’s equipment. Two months later, Ocado announced that its Canadian partner Sobeys would close its Calgary facility.

Steiner admitted this year that “the market for large automated distribution centers in the U.S. is smaller than we thought.”

Clive Black, an analyst at Shore Capital, said the plan to sack Steiner “would not be completely incomprehensible given the events”. [low] share price and how much he paid himself”.

Shore said Ocado had a poor return on invested capital and had “made very little profit” throughout its existence.

But he said Steiner “single-handedly oversaw the creation of a FTSE 100 company in Ocado” and that those who invested and sold shares at the right time made “a lot of money”.

Some large shareholders, such as Jörn Rausing, who controls a 10 per cent stake and also sits on Ocado’s board, are also thought to be supportive. Records show Rausing increased his stake £5.4m more shares in March alone.

None of the major shareholders contacted by the Guardian were prepared to speak for or against Steiner.

But an Ocado insider said Steiner’s departure would not be welcomed by senior executives at the company, which is now seen as being “on the right track” in terms of technology development. They said “majority” [of insiders] Back to Tim. Leaving now could create extra problems internally. According to me [the pressure] It comes from large shareholders.”

Ocado declined to comment.