Marketwatch

SUPERMARKET chain Morrisons is likely to face shareholder ire this week over plans to award shares to its finance director worth up to 230 per cent of his basic salary.

The Association of British Insurers (ABI), which represents City investors, and corporate governance advisory firm Pirc have both flagged up the pay deal to shareholders ahead of the company's annual meeting in Bradford.

The ABI has issued an amber alert for the pay proposals - a signal that there are issues to be considered before voting on the package.

Britain's fourth-largest supermarket has offered finance director Richard Pennycook shares worth 1.25 million, assuming criteria are met.

The Morrisons remuneration committee offered the package as it considered it "essential to secure Richard Pennycook's services" as finance director.

The move came after its chief, Marc Bolland, left to take up the top post at Marks & Spencer and was replaced by Dalton Philips.

In the annual report, the company said: "While this is an unusual arrangement, the committee considers that the granting of this award is in the long term interest of shareholders and is satisfied that it is appropriate."

In other retail news, Halfords and Home Retail Group - which owns Argos and Homebase - are expected to say trading conditions remain tough.

Halfords will report back on a tough year on Thursday after a poor Christmas for sales of bicycles and satellite navigation systems more than offset a boost to demand for car maintenance products during a harsh winter.

Home Retail has warned of an uncertain year ahead as consumers are squeezed by the January VAT hike and government cuts. The group said in April it is planning on the basis that like-for-like sales will decline by low-to-mid single digits at Argos and will be broadly flat at Homebase. The market awaits an update on Thursday.