Tesco tears up pay rules to hand boss £6.4 million

TeSCO boss Dave Lewis was paid £6.4m last year after the board boosted his bonus by removing Ocado from the supermarket’s ‘peer group’.

The chief executive, who is leaving later this year, received £4.8m in bonuses thanks in part to the performance of the grocer against its rivals.

But the pay committee decided that Ocado was no longer a peer due to its focus on the sale of its robotic warehouses and technology.

Before the change Tesco underperformed its rivals by 4.2pc over three years, but once Ocado was removed it outperformed the new peer group by 3.3pc. Moving the goalposts, which usually only happens if rivals are delisted or taken over, pushed Lewis’s share bonus up by £1.6m.

The bumper payday brings his total earnings as chief executive of the firm to £29m since 2014. his pay this year was more than 300 times more than an average employee earning £21,000.

Overall, Tesco has handed out £6.1m of shares to executives as part of a 2019 bonus plan, according to a stock market announcement yesterday.

The grocer caused a row when it confirmed a £900m final dividend despite getting Government support designed to help firms through the pandemic.

Tesco has received £585m of business rates relief through a scheme set up to help the retail industry. The annual report also revealed former chief executive Philip Clarke, who held the top job during the 2014 accounting scandal, had converted his final salary pension entitlement into a £10.7m lump sum.

The Tesco announcements come just two days after Sainsbury’s announced £1.8m of bonus payouts to senior staff less than a fortnight after deferring the dividend.

Outgoing chief executive Mike Coupe and his successor Simon Roberts were among the team of nine who recently received 950,000 shares in the grocery chain. It will save £450m from the business rates holiday.