Turnaround Tesco in boss’s pay row
TESCO has been accused of handing ‘excessive’ pay to chief executive Dave Lewis and other governance failings ahead of its annual meeting.
Lewis earned a total of £4.9 million in the year to February 24, an increase of 17.5 per cent on his £4.1 million the previous year.
Shareholder lobby group Pirc said his salary is high in comparison with his peers, and highlighted the ‘potential excessiveness’ of his rewards, saying he is paid 267 times as much as the average wage amongst his colleagues at the supermarket.
His £1.25 million base salary was boosted by a £971,000 award under a long-term incentive scheme, a £2.3million bonus plus £378,000 pension and benefits.
Pirc said his rewards have outstripped the value created for shareholders, and it urged them to vote against the pay report at Tesco’s annual meeting on June 15.
But the retail chief has won praise in the City for leading a strong recovery at Tesco after it suffered from an accounting scandal in 2014, before he arrived. In its most recent results, Tesco defied the gloom in the retail sector and posted a huge surge in pre-tax profits to £1.3 billion.
Lewis has also won plaudits for overseeing the £3.7 billion takeover of wholesaler Booker Group.
A rival shareholder adviser group, Glass Lewis, supports Tesco’s pay structure.
However Pirc raised other governance issues including over the independence of its auditors, Deloitte. Pirc said it has ‘major concerns’ because less than 10 per cent of its fees from Tesco relate to auditing, with the rest coming from consultancy work carried out for the supermarket group.
Pirc accused chairman John Allan of ‘over boarding’ – holding too many board jobs at once. He also chairs Barratt Developments.
Lewis has been tipped to succeed Paul Polman as chief executive of Unilever, where he previously held a senior role. He dismissed the talk recently, saying colleagues will ‘have to put up with me for a while yet’.
Tesco declined to comment.