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Tesco under fire over chief Dave Lewis’s ‘excessive’ £4.6m pay packet

By Henry Saker-Clark, Press Association City Reporter
Shareholder advisory specialist PIRC advised that investors oppose Mr Lewis's £4.6 million pay deal.

Tesco has come under fire for handing “excessive” pay to top boss Dave Lewis ahead of its annual meeting by an influential shareholder lobby group.

Last month it was announced that Dave Lewis picked up a £4.6 million pay packet, months after 9,000 jobs were put at risk at the retail giant.

Mr Lewis earned a £1.6 million bonus, on top of his £1.25 million base salary and £1.3 million through the company’s long-term share plans, Tesco’s annual report revealed.

Shareholder advisory specialist PIRC advised that investors oppose the pay deal, which will see Mr Lewis earn 226 times the median wage of a Tesco employee, at £20,364.

PIRC said it had “concerns about the potential excessiveness” of the pay structure, with incentive awards “directly linked to salary levels”.

The salary of Mr Lewis, who has led Tesco for five years since joining from Unilever, is considered to be the highest when compared to the salary of other chiefs in his sector, it added.

The annual report also showed that chief financial officer Alan Stewart has received a total pay packet of £2.6 million for the year, buoyed by a £834,000 bonus.

However, Mr Lewis’s pay represents a fall from last year, when he received a £5.1 million package on the back of a significantly higher bonus payment.

Neither the top boss or finance chief have received increases in basic salary since joining the business, compared to a 14% salary increase for staff, Tesco said.

It is the third consecutive year that PIRC has criticised the size of executive pay at the supermarket firm.

The advisory group has also called for shareholders to oppose the re-election of John Allan at the annual general meeting (AGM), on the grounds that he also acts as chairman for FTSE 350 firm Barratt Developments.

It comes after Britain’s biggest supermarket chain recently beat forecasts to report a 28.8% rise in annual pre-tax profits to £1.67 billion last year, while revenue grew 11.2% to £63.9 billion.

However, fellow shareholder lobby groups ISS and Glass Lewis have backed the pay deal and re-election of Mr Allan, recommending that shareholders support all motions at its AGM.

A Tesco spokesman said: “After four years, we have met or are about to meet the vast majority of our turnaround goals, and our business is on a more sustainable footing.

“Guided by our remuneration policy, which received over 93% of votes in favour at our 2018 AGM, we aim to reward responsibly and fairly so that all colleagues are rewarded competitively against the relevant pay benchmark for their role.

“This is a consistent principle, across every level of our business.”