At the start of his reign Philip Clarke said Tesco would not be going all “touchy-feely” on us.
But he did promise a change in tone, including a vow to make the leadership of the business more transparent than it had been. An effect of that was seen yesterday with the shake-up of senior pay detailed in the supermarket’s annual report.
Chairman David Reid said the new structure was “simpler and more collegiate, with clear strategic financial targets”, adding that the new system would deliver “broadly the same levels of remuneration as before but in a better way and more aligned with the interests of our shareholders”.
So it’s not how much you earn that counts, but how you earn it.
Reaction to the shake-up has varied. You can pretty much pick and choose your preferred winners and losers, with observers split over whether the changes marked a decisive response to shareholder unrest, a sop to keep critics quiet – or a ploy to shield the bosses of underperforming parts of the business.
Not surprisingly, given recent speculation over the supermarket’s toiling US arm, interest has centred on Tim Mason, the Fresh & Easy boss who was also recently installed as deputy group CEO – one heartbeat away from the presidency, as they say in the States.
Mason picked up £3.1m last year, second only to Sir Terry. Going forward, he’ll keep his base salary of £832,000 plus a so-called ‘expatriate allowance’ of £282,000 for having to live in the colonies.
“Tesco’s US boss loses bonus in new pay policy” straight-bats The Times today, noting that Mason took home almost £700,000 last time for hitting certain short-term targets.
The Guardian, which has had plenty of run-ins with Tesco in recent years, had the supermarket trying to “pacify shareholders with changes to top pay”.
Columnist Nils Pratley has little doubt the changes are “cosmetic”, archly quoting Reid’s use of the word ‘collegiate’ on three separate occasions in his short piece. He suggests shareholders could find it “perverse” that “Mason could still collect handsome bonuses to reflect the sparkling performance in the rest of the Tesco empire” – even if Fresh & Easy were tanking horribly.
The Independent is more generous. It accepts that Tesco has put “higher hurdles” in front of its “millionaire grocers” and awards the move a “thumbs-up from analysts”.
While the numbers involved are far beyond the reach of most of us (yes, even Daily Bread columnists), it’s worth bearing in mind that they’re dwarfed by the eight-figure sums trousered by some executives – the popular Irene Rosenfeld, say.
Considering the vastness of the £67bn Tesco empire, and its importance to the UK economy, the salaries of Clarke and his cohorts are peanuts. Yet monkeys they are not.
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