City forecast: Sainsbury's set to face shareholder pressure to pay National Living Wage

Legal & General, HSBC, and pension fund Nest are among big investors that have got behind the shareholder group leading the resolution.

Sainsbury's is being challenged to commit to matching the basic living wage amidst the worsening cost-of-living crisis as it also agreed to hand a £3.8 million pay and bonus package to boss Simon Roberts in June.

The chain raised the minimum wage for its direct employees in January to £9.90 an hour outside London and £11.05 an hour for workers in the city, to surpass the National Living Wage.

However, activists say there has been no commitment to match the living wage in the long term, nor have pay rises been extended to contracted staff like cleaners.

Shareholder advisory group Pirc has also called on shareholders to oppose the remuneration package for bosses, including Mr Roberts' overall pay deal.

It comes as M&S also faces challenges from shareholders against bumper bonuses paid to its former chief executive Steve Rowe, while the company has still not returned dividend pay-outs. Shareholders will vote on this issue at that company’s annual general meeting on Tuesday July 5.

Experts emphasise that the resolutions reflect more shareholders and staff being empowered to challenge big companies and hold their boards to account.

Lee Wild, head of equity strategy at Interactive Investor, said: "It is hugely exciting to see companies, especially mammoth UK names such as M&S and Sainsbury's, being challenged thoroughly on a public stage. It is no longer enough for a company to pay lip-service – shareholders want to see real, meaningful, change."

Mr Wild added that the significance of the first shareholder resolution on wages should not be understated. "The resolution, driven by Share Action, comes at a time when the cost-of-living crisis continues to bite, and lower-paid workers across the UK are particularly vulnerable,” he stated.

Pressure

"Therefore, a company of Sainsbury's size and scale can reasonably be expected to give all staff the basic standard of living – and many other profitable companies will be, or already are, facing pressure on this issue too."

Meanwhile, Barclays recently announced a £1,200 pay rise for customer-facing and junior employees, which trade union Unite heralded as a victory for its members following pressure on the high-street bank to respond to the rising cost of living.

Unite has ramped up campaigns for its members in light of soaring inflation bringing down the standard of living for employees.

The union took action against banking group Lloyds, which later announced in June that it would hand out a £1,000 bonus to the majority of its staff to support them amidst the bleak economic backdrop.

Real disposable income fell for four quarters in a row since records began, the Office for National Statistics said on Thursday, as rising inflation squeezes household finances.