Sainsbury’s has rejected calls for the business to become an accredited living wage employer.

Shareholders voted against the call 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.

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.

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?”

Sainsbury boss defends decision to opt out of being  accredited living wage employer

Mr Scicluna said: “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 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.”