Shareholders in Sainsbury’s have rejected a call for the business to become an accredited living wage employer after the supermarket’s chairman told them it would reduce the company’s flexibility.
83.31% of shareholders voted against the resolution, while 16.69% voted in favour of it.
Martin Scicluna, Sainsbury’s chairman, warned that becoming an accredited living wage employer would reduce the company’s flexibility even as the cost of living for its staff soars.
Mr Scicluna said that he believes the company pays well, but rejected the call from non-profit group ShareAction.
Simon Rawson, director of corporate engagement at ShareAction, attended the AGM in person and asked: “So can the board tell us what discussions it’s had about balancing the interests of different stakeholder groups and how it reached a judgment not to pay… a wage that covers the cost of living?”
“We are the leader in the supermarket world in paying the living wage right now. We’ve got an amazing track record of being a responsible business. And there are other retailers who frankly have not demonstrated that they’re responsible,” Mr Scicluna said, pointing to the return of business rates relief to the Government, among other things.
“We believe we have behaved very, very responsibly, the only difference between your co-filers and us is that we don’t want to go the full length of being accredited,” he told ShareAction.
“We feel that does not give us the flexibility when we’re trying to balance the needs of all the stakeholders.”
Despite the majority of shareholders voting against the resolution, Rachel Hargreaves, campaign manager at ShareAction, said the vote “sent a powerful message from shareholders that Sainsbury’s should make a Living Wage commitment to all of its workers”.
She added: “As we deal with the continued effects of the cost-of-living crisis, the conversation round low pay isn’t going to go away, and both employers and investors need to step up.”
ShareAction and others – including Legal & General, HSBC and Nest – had asked Sainsbury’s to ensure that it paid all of its 189,000 colleagues a living wage amid the cost-of-living crisis.
The company already pays its in-house staff the living wage.
But the accreditation would force Sainsbury’s to commit to keeping up with the living wage in coming years, and also to ensure contractors were paid a living wage.
ShareAction said that supermarket staff had been recognised as key workers during the pandemic, keeping food on the table of households.
The public therefore expects them to be appropriately rewarded, it said, yet they are one of the largest groups of low-paid workers in the country.
It said that around half of companies in the FTSE 100 – of which Sainsbury’s is a member – are accredited.
Mr Scicluna also defended the pay for the company’s top bosses, including the chief executive who made £3.8 million last year.
“We have got to ensure that we reward and we incentivise our management,” he said.
“You can’t buck the market. We could go with your argument and reduce very significantly at the top, but I tell you our competitors would leap over the fences to take away our really good and able people.
“There’s a market out there and you can’t ignore a market when you’re selling carrots, and you can’t ignore a market when you’re setting salaries.”