UK: Big bonuses for Tesco directors after record-breaking year
Three executives at British supermarket giant Tesco received pay packages of over £1m in 2000, according to operating figures released yesterday (15 May). The bumper payslips reflected the record-breaking year at the retailer, who revealed in February that it had surged through the £1bn profit barrier. Sales during 2000 rose 11.7% to £21bn.
Terry Leahy, CEO of the group since 1997, stressed that the pay was the culmination of a long-term incentive scheme, reflecting the many years of Tesco's good performance, and that the executives had opted to receive a large chunk of the bonuses in shares that cannot be exercised immediately.
Leahy received the lion's share of the pay and saw his total remuneration package rise 37% from 1999 to £1.6m. This is made up of a basic salary of £771,000 plus bonuses.
The other two directors to receive over £1m were deputy chairman David Reid, who saw his pay rise 27% to 1.3m (£613,000 plus bonuses), and commercial director Jim Gildersleeve, who picked up £1.2m.
Taking into account all the associated benefits, salary, bonuses and share options, three further board members collected more than £1m for last year's work. Finance director Andrew Higginson was paid £809,000, marketing director Tim Mason received £874,000 and company secretary Rowland Ager got £862,000.
Leahy defended the pay rises, which added up to £8.8m, pointing out that Tesco delivered a 62% total return to its shareholders last year. A company spokesman added that customers and staff had also benefited from the business strategy of the group, which currently focuses on maintaining lower prices and improving customer service.
The shop workers' union Usdaw also welcomed the remuneration packages. A union spokesman commented: "We would be the first to criticise a company which was handing out big pay deals to its board members when it was making a loss. But Tesco has been creating jobs and making profits which are distributed to our members."
Not everyone is overjoyed at the ample pay, however. Farmers and consumer groups have already criticised the profits, which they believe were generated through squeezing suppliers.
One city analyst told the Independent newspaper: "I think they are taking the piss. They're overpaid."
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