Just 17% of Sainsbury’s shareholders vote to extend living wage

Only a sixth of shareholders at Sainsbury’s, the UK’s second-biggest supermarket group, voted in favour of a resolution that would have introduced the policy at the company’s annual general meeting (AGM).

ShareAction, a campaign group urging Britain’s largest employers to reimburse staff with a real living wage said they have sent a powerful message, with some investors showing a commitment to supporting rises for the low-paid.

The living wage is set at £11.05 in London and £9.90 outside the capital.

It is calculated each year, overseen by a commission with experts drawn from various sectors.

This year, the Living Wage Foundation is expected to bring forward its latest increase by a month, to October, because of the pressure on household finances.

ShareAction has gained support from various institutions including Legal & General Investment Management, HSBC, Fidelity International and Coutts for the resolution.

Although Sainsbury’s pays the living wage to its 171,000 employees across over 1,400 UK stores, it is not fully accredited to the Living Wage foundation’s scheme. If it was, it would be required to pay an appropriate wage to contract workers procured from outsourcing agencies.

ShareAction said it was pleased with the outcome of the vote.

However, it did not come close to the 75% backing required for the resolution to pass – as just 17% of shareholders backed the Sainsbury’s resolution.

The majority adhered to advice issued from shareholder advisory groups Glass Lewis and ISS as well as the Sainsbury’s board, to oppose the resolution.

Rachel Hargreaves, a ShareAction campaign manager, said: “Today’s vote sent a powerful message from shareholders that Sainsbury’s should make a living wage commitment to all of its workers. Investors have shown that they can and do support pay rises for the low paid.

“Equally, we’re disappointed that a large proportion of shareholders chose to prioritise short-term returns over the real long-term issue: rising inequality in our society. As we deal with the continued effects of the cost of living crisis, the conversation around low pay isn’t going to go away, and both employers and investors need to step up.”

Martin Scicluna, chair of Sainsbury’s, thanked investors for their “overwhelming votes of support and confidence”.

He said the business was “a leader in the supermarket world in paying the living wage” and had been among the first to increase pay for shop floor staff this year as soaring inflation triggered a cost of living crisis.

He said he did not want to commit to the national scheme because: “To effectively balance the needs of customers, colleagues, suppliers and shareholders we must preserve the right to make independent business decisions not determined by a separate body.”