Morrisons Faces Protest Over Ex-Chief's Bonus

Shareholders in Wm Morrison, the embattled supermarket chain, will deliver a bloody nose to its board next week after it paid its former boss a £1m bonus despite a slump in profits.

Sky News understands that Morrisons is braced for a substantial revolt against its remuneration at its annual general meeting, which will come four months after Dalton Philips was ousted as the company's chief executive.

Sources said on Saturday that they expected around 20% of votes to be cast against the pay report, although the actual figure could be higher.

Institutional Shareholder Services, an influential voting advisory agency, has advised investors to oppose the remuneration report.

Some fund managers are furious that Mr Philips received a £1m bonus for last year, equating to 60% of the maximum possible payout, despite the poor performance of the business.

Andrew Higginson, Morrisons' chairman, sacked Mr Philips soon after Christmas sales figures revealed that the chain was among the retail sector's biggest casualties during the festive trading period.

At the time of the release of its annual report, a Morrisons spokesman said that while the company’s profit had fallen by 52% to £345m last year, the outcome was nevertheless in line with a revised target set by the board.

Morrisons' like-for-like trading performance has consistently disappointed the City, reinforcing the scale of the difficulties confronting the UK's biggest grocers, including J Sainsbury and Tesco.

Mr Philips, a former executive at Loblaw, Canada's largest food retailer, became Morrisons' boss in March 2010, and has also served on the board of the Department for Business, Innovation and Skills.

In addition to last year's bonus, he is also receiving a hefty payoff, which has further angered some investors.

Last autumn, Morrisons announced thousands of job cuts and the introduction of a new loyalty scheme in a bid to stem the decline in sales.

Under its new chief executive, David Potts, the company is attempting to rebuild trading momentum, with like-for-like sales showing a further decline in the 13 weeks to May 3.

Morrisons declined to comment ahead of the AGM vote.