Sir Terry Leahy, CEO of UK retailing giant Tesco, took home a pay packet worth £2.45m (US$3.55m) for his work during 2001, a 53% increase year-on-year, comprising of a basic salary of £842,000, plus £8,000 in profit-sharing, £25,000 in benefits and a further £1.5m through the group's short-term and long-term incentive schemes.

A further seven directors at the supermarket chain also saw their pay soar to more than £1m last year, according to figures revealed yesterday [Monday] in Tesco's annual report. Last year, three directors were given seven-figure remuneration packages.

The company's deputy chairman David Reid welcomed a 48% increase in his total package to £1.99m comprising of a basic salary of £651,000, profit-sharing worth £8,000, benefits of £61,000 and another £1.27m from the incentive schemes.
 
Commercial and trading director John Gildersleeve meanwhile picked up £1.74m, a 46% rise year-on-year.

The newest board members to break the million-pound barrier in personal pay are marketing and e-commerce director Tim Mason (£1.37m); finance director Andrew Higginson (£1.31m); company secretary Rowley Ager (£1.23m); retail director David Potts (£1.15m) and logistics and IT director Philip Clarke (£1.14m).
 
According to the report, the Tesco directors are also now guaranteed sizeable increases in their pension entitlements. Forty-six year old Leahy will collect an annual pension of £331,000 a year from his retirement at the age of 60. Reid will meanwhile be given £327,000 and Gildersleeve £334,000.

Tesco defended the bumper pay-packets, saying that money from the incentive schemes is paid out in shares, not cash, which must be held for two to four years, and insisting that they are only paid "if challenging targets are met".

"This year we achieved those very challenging targets."