Executives at Tesco saw increases in their pay packets last year, but missed out on any bonus as the company failed to turn around a slump in profits.
Tesco’s annual report, released this morning, shows chief executive Philip Clarke received a total pay package of £1.63m last year including pension contributions.
The package was 27% higher than the £1.28m he received in 2012/13, but a long way short of the £4.6m he picked up in 2011/12 as bonus targets were not hit.
Tesco bases executive bonus payments on profitability, financial performance (online sales, like-for-like growth) and other non-financial performance measures (customer service, carbon dioxide reductions).
Tesco wrote in its annual report: “We have increased internet sales by 15% reflecting our focus on our multichannel strategy. We are getting better feedback from customers and colleagues and have significantly reduced the level of CO2 used across the group.
“Despite this progress the bonus profit underpin was not met and therefore the executive directors will not receive a bonus in respect of 2013/14.”
The only other executive director on the Tesco board is outgoing finance director Laurie McIlwee, who took home a pay package worth £1.54m.
Clarke’s basic pay will rise by less than 1% to £1.15m next year.
Tesco said the average increase for executive directors in 2013 was 2%, which was the same as the 2% average across the company.
Last month Tesco reported a drop in full-year group profit of 6% and a fall in UK like-for-like sales of 1.3%.
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