(qlmbusinessnews.com via uk.reuters.com — Thur, 23rd June 2022) London, UK —
Proxy advisers Glass Lewis and ISS are recommending Sainsbury's investors vote against a resolution at its annual meeting calling for Britain's second-biggest grocer to commit to paying the so-called real living wage to all its workers by July 2023.
Glass Lewis said adoption of the proposal from responsible investment group ShareAction “could border on micromanagement by shareholders.”
“We believe that with a matter as dynamic and company-specific as the wages paid to employees and contractors, it may not be appropriate to allow shareholders or a third party to dictate those terms,” it said.
It also warned the resolution's adoption could “hem the company into a constrained position” if market conditions changed.
Institutional Shareholder Services (ISS) said it opposed the resolution because its adoption would mean that Sainsbury's “would be involuntarily held to a different standard to its competitors.”
ShareAction had co-ordinated the filing of the resolution by an investor coalition that includes Legal & General and Nest.
Sainsbury's (SBRY.L) annual general meeting is on July 7.
The real living wage was established by the Living Wage Foundation charity and independently calculated by the Resolution Foundation think tank, according to how much workers and their families need to live.
The rates are currently 11.05 pounds ($13.56) per hour in London and 9.90 pounds per hour in the rest of the United Kingdom. That compares with Britain's main government-mandated minimum wage rate of 9.50 pounds per hour.
The Bank of England is watching pay closely as it weighs up the risk that the recent jump in inflation to a 40-year high of 9.1% becomes embedded in the economy.
Sainsbury's has since May been paying real living wage rates to all its directly employed staff but is not doing so for all its third-party contractors, such as cleaners and security guards.
“To effectively balance the needs of our customers, colleagues, suppliers and shareholders we must preserve the right to make independent business decisions which are not determined by a separate body,” a spokesperson for Sainsbury's said.
Sainsbury's is recommending shareholders vote against the resolution. The company has a workforce of 189,000, making it one of Britain's biggest private-sector employers.