Shareholders attending J Sainsbury's agm tomorrow have been urged to oppose a controversial pay and bonus deal offered to Justin King, the chief executive.

The board raised his pay partly to persuade him to stay on board after the failed takeover approach by CVC, the private equity group, this year. It is likely he would have been offered a far more lucrative salary if Sainsbury had been taken under private control.

Pirc, the corporate governance lobby group, said that it was concerned about the "potentially excessive" rewards on offer to Mr King and other executives following the £11 billion bid, which was rejected by the members of the founding Sainsbury family, at the time the largest shareholders.

Under a long-term incentive plan, Mr King has been offered shares worth 62.5 per cent of his salary (£531,000) compared with 45 per cent last year. The remuneration committee said that this was because of the “exceptional circumstances surrounding the company this year following the conditional approach by the CVC consortium”.

But Pirc said that increased incentives offered to directors were not attached to sufficiently challenging performance targets. It says that Sainsburys told it that the more generous bonuses were "partially in response to shareholder concerns regarding retention, in light of the recent private equity activity".

His contract also includes a payout worth 175 per cent of his salary (£1.5 million) if there is a change of control at the group.

As well as opposing Sainsbury's remuneration report, Pirc is recommending that shareholders abstain on the re-election of Mr King as a director. Sainsbury's holds its annual shareholder meeting tomorrow.

Mr King’s total pay and bonus package including shares and pension arrangements rose to £2.1 million last year, according to the annual report.

Mr King's base salary increased 17 per cent to £850,000 this year. Sainsbury's has said his salary has fallen behind his peer group.

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