Morrisons (MRW) CEO David Potts saw his pay package jump by 24% last year and could be in line for a further pay boost in future years under newly proposed share reward plans.

Potts received his maximum possible payout in the year to 29 January 2017 under Morrisons’ existing executive pay scheme after spearheading the supermarket’s sales recovery during the period.

He received a cash bonus of £1.7m, which was the maximum 200% of his £850k base salary after Morrisons hit targets relating to profitability, cost reductions and achieved 1.7% like for like growth against a target of flat sales.

The increased bonus took Potts’ total pay to £2.8m for the year, a 24% increase on the £2.25m he received in 2015/16 after an annual bonus of £1m.

Morrisons’ remuneration report said Potts has waived a pay rise offered by the remuneration committee, but the CEO’s pay could be hiked in future years by new pay reward rules being proposed.

The new rules would see the maximum possible award under Morrisons’ long-term incentive scheme (LTIP) rise from 240% of base salary to 300% of salary from 2017/18.

This means his LTIP award could be worth as much as £2.55m a year and – in addition to his 200% maximum bonus – would take his maximum pay up to £5.1m.

One caveat is that under the new proposed pay rules Morrisons directors will have to hold shares worth 250% of their salary – up from the current level of 200%.

For 2017/18 Potts was awarded a base salary rise equivalent to store colleagues, but declined this increase.

According to the annual report Morrisons staff had an average salary increase of 5.4% and a bonus increase of 31%.

The total pay of CFO Trevor Strain rose from £1.45m in 2015/16 to £2.7m last year, as his annual bonus rose from £763k to £1.15m and he received £783k under the LTIP scheme.

Former boss Dalton Philips received £354k in LTIP awards during the year due to the vesting conditions of shares previously issued in June 2014.

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