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Last Updated: Friday, 21 May, 2004, 17:11 GMT 18:11 UK
Sainsbury's 'us and them' bonuses
Sainsbury's Savacentre store. Pic from J Sainsbury's website
Sainsbury's has been struggling against its rivals
J Sainsbury's new boss is to get share options worth around 1.5m, just as staff have learned they are to lose a long running Christmas cash bonus.

The firm has confirmed that for the first time in 25 years, full-time staff will not be getting their festive bonus in 2004, today worth some 100.

Instead the supermarket chain's staff will have to make do with a 5% extension in store discount.

Sainsbury's is struggling against its rivals, and has seen profits slip.

I work for Sainsbury's and am disgusted - our new chief executive should not be rewarded with shares until he proves he can turn the business around
Martin Spence, Sainsbury worker
The decision to end the Christmas bonus will affect 100,000 full-time Sainsbury's staff, who are instead having their store discount increased from 10% to 15% from October to December.

Sainsbury's said the decision had been made following a successful trial.

Unfair?

The supermarket giant is giving Justin King, who joined the company as chief executive from Marks & Spencer two months ago, the option of almost half a million shares, exercisable at 274 pence each from 2007.

Our members will look at this as the directors operating a 'one rule for us, another rule for the workers' policy
Joanne McGuinness, Usdaw union

Additionally, he will be allowed the option to buy a further 184,700 shares, worth over 0.50m, dependent on him meeting performance targets over the next three years.

The options package comes after chairman Sir Peter Davis was awarded 2.4m in shares for his work during a year in which profits fell 2.9%.

The supermarket chain said the money saved by denying workers their bonus would be spent "on improving our other incentive schemes (such as the increase to staff discount) over the coming months.''

Joanne McGuinness, national officer of shopworkers' union Usdaw, said staff would feel understandably angry at the award of big bonuses to directors when many were not getting a pay rise themselves this year.

"Our members will look at this as the directors operating a 'one rule for us, another rule for the workers' policy," she said.

Sainsbury's has struggled against its main supermarket rivals Tesco and Asda in recent years.

While they have both announced seemingly ever-growing record profits, Sainsbury's has seen its slide on disappointing sales and an ongoing restructuring drive.

Last week it reported a 2.9% fall in annual profits and said it was cutting prices in an attempt to win back market share.

In addition to losing their Christmas bonus, staff at Sainsbury's head office will lose their additional earnings related bonus scheme.


One rule for bosses, another for workers or a sensible and proper, albeit unfortunately timed, business decision? Your comments:

An extra 5% discount will mean staff will have to spend 2,000 in the run up to Christmas to recoup the 100 taken from them. That's about 200 per week. Shrewd move JS, make your staff give you a bonus of 1,900. Glad I don't work for them. If Tesco et al had any sense they'd offer JS staff a discount - that would be a superb bit of marketing!
David, Norwich, UK

I work for Sainsbury's and am disgusted that hardworking staff like me are to lose our Christmas bonuses. It is not our fault that the company is doing badly. Our new Chief Executive should not be rewarded with shares until he proves he can turn the business around. Christmas is an incredibly busy and stressful time for all Sainsbury's staff so the bonus was gratefully received and well earned. An extra 5% staff discount should not be a replacement for bonuses; it should be in addition and for the entire year.
Martin Spence, Aberdeen, Scotland

People who feel this is unfair clearly have no concept of business. Justin King has an excellent proven track record and may be just what Sainsbury's need to turn them around. Staff should be happy they are only paying him the market rate, otherwise it may be more than their Christmas bonuses they lose out on....it may be their jobs!
Andy Butler, London

Time to stop shopping at Sainsbury's in the light of this - could not the staff have been given some free shares also if Sainsbury's is too strapped for cash at Christmas?
Michael, Hove

I think it's disgusting - why do so many big bosses get so much, even when organisations are "failing"? It's always the people who do the real work who lose out! I know people who work for Sainsbury's and doubt they'll be happy. Morale is bound to suffer.
Jen, UK

It's excellent business practice for ensuring your staff have no loyalty to the company.
Aisling Tracy, Bristol

I work for Sainsbury's at the moment and worked there previously for eight years. It's amazing how much staff morale has gone down in the last eight years - they simply don't care about the general staff, only the fat cats in their suits. Try thinking more about the real people who work for you and then you will see a turnaround. The company are terrible, they make their shop floor managers work 12 hour days - it's one rule for higher managers and another rule for others, there is hardly any staff morale. Contracts are changing - no sick pay for first three days, on newer contracts since last August. How come you can find some money to entice the big wigs to push a pen around but not find enough to put more staff on the checkouts?
Clair, Guildford

My wife works for Sainsbury's part time on a twilight shift - she has assured me once we return from our imminent holiday that she will resign and several of her colleagues will also. The extra cost in recruitment and lost productivity will far outweigh the 100. Sainsbury has lost touch with its employees, the first sign of a failing company.
Vince, West Sussex, Angmering,England

I just left Sainsbury's having worked there for almost eight years. I can tell you that morale among the staff is at an all time low. They don't replace staff as they leave and expect the same level of work and commitment.
Sue, London

The days of Christmas Bonuses are past. No individual deserves to be given a bonus for simply turning up. Bonus should be for performance over and above the expected level. Sainsbury's is a retail business and staff need to learn how the retail world operates
Gill, Glasgow, UK

I work for a major retailer and have just found out I won't be getting my bonus this year - that's life! I'd rather be getting an extra 5% discount than have no job at all. If Sainsbury's don't start to cut costs soon they will be forced to cut jobs.
Caroline, Chester

I work in the local Sainsbury's store as a part time student. Sainsbury's need to invest more in their staff rather than cutting the Christmas bonus. It is no wonder Sainsbury's cannot hold out against Tesco because they simply are not looking after their workforce. The staff are generally not motivated and this has a knock-on effect on the level of service the customers can expect. The staff generally feels unappreciated and feel that their needs are being constantly ignored by the senior management. Also the communication between departments in store is appalling and needs to improve. It seems the company would rather waste money by spending it in the wrong places.
Gary McStea, Lurgan, Northern Ireland

There are a number of comments along the lines of 'be glad you have still got a job'. I think that the authors of these comments are rather missing the point; Sainsbury's is going through tough times. If they don't cut costs, they will be gone in short order. The staff know this. What upsets them is that while THEY lose their bonuses, their new (and thus unproven in this job) boss gets a very large payout. Everybody realises that sacrifices have to be made; what galls is that the sacrifices aren't being made across the board. I have recently retired as a store manager for one of the large supermarket chains, so I know something whereof I speak!
Derek, Nottingham

I work for Sainsbury's and it's true that morale is low - the emphasis is on profits rather than staff. Losing the Christmas bonus and replacing it with an extra 5% discount is not going to help matters. Sainsbury's - making life taste bitter.
Lucy, Sheffield

I have worked for Sainsbury's now for 15 years and I actually think it is a good place to work. So we lose a 100 bonus, after tax etc. It probably equates to 65 - big deal! Believe me, the people complaining about it are the same people who used to moan about it only being a hundred quid. I think it is a good business decision and some times the right move is not always the most popular.
Jim Roberts, Letchworth




SEE ALSO:
Sainsbury's sees slide in profits
19 May 04  |  Business
Sales jump boosts Tesco profits
20 Apr 04  |  Business
Sainsbury's reports falling sales
26 Mar 04  |  Business
Sainsbury's U-turn over chairman
17 Feb 04  |  Business
Morrisons delivers profits rise
18 Mar 04  |  Business


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