Payments are part of \u00a330m in total pay for Dave Lewis since he joined Tesco n 2014<\/p>\n
Former Tesco boss Dave Lewis cashed in more than \u00a313m of share options in October as he exercised bonuses handed out over his six years at the helm after leaving the group.<\/p>\n
The payments are part of more than \u00a330m in total pay for Lewis since he joined Tesco in 2014. They do not include up to 1.6m further share awards, currently valued at \u00a33.7m, which Lewis will be able to cash in over future years, subject to the group\u2019s performance.<\/p>\n<\/p>\n
Lewis did not receive any payoff when he left the company and will not receive a final annual bonus for 2021 as the company missed profit targets, according to the group\u2019s annual report published on Tuesday.<\/p>\n
He received \u00a31.6m for his final seven-month stint at the retailer, down from \u00a36.3m for the previous year, which was the biggest annual pay award for a Tesco executive in a decade.<\/p>\n
Tesco\u2019s remuneration committee said they had decided not to make adjustments to the profit target to enable an annual bonus pay out for executives despite the pandemic.<\/p>\n
The board\u2019s non-executive directors said that after \u201cmuch debate\u201d they had decided not to \u201capply any discretion\u201d despite the pandemic, which had led to millions of pound in additional costs to support safety measures and staff in stores. Tesco\u2019s decision to hand back business rates support to the government and bad debt at the group\u2019s banking operation also hit profits.<\/p>\n
The group\u2019s directors also did not adjust performance measures for the long term bonus paying out this year \u2013 which only applied to former finance director Alan Stewart, who left in April. He received only 23% of the maximum long term bonus or \u00a3433,000 in cash and shares taking his total pay out for the year to \u00a31.4m, down from \u00a33.6m a year before.<\/p>\n
Total directors\u2019 pay almost halved to \u00a35.9m from \u00a311.7m a year before in the light of the bonus miss and a handover to new chief executive Ken Murphy and new finance director Imran Nawaz.<\/p>\n
The decision on bonuses comes after Tesco shareholders delivered a significant protest vote against pay last year with investors representing just over 67% of Tesco\u2019s stock voting not to back the group\u2019s remuneration report. Shareholders objected to a late change to targets an executive bonus scheme, which handed an additional \u00a31.6m to Lewis and \u00a3900,000 to Stewart.<\/p>\n
While directors did not adjust the targets for the two bonus schemes which were due to pay out this year, they did adjust targets for long term bonus schemes which kicked off in 2019 and 2020.<\/p>\n
Murphy received \u00a3992,000 for his first five months at the helm, including \u00a3363,000 in compensation for income forfeited at his previously employer, the owner of health & beauty retailer Boots.<\/p>\n
Murphy\u2019s signing on fee was eclipsed by that for Nawaz who received \u00a3644,600 in compensation for loss of stock awards and \u201ccommuter support\u201d from his previous job at Tate & Lyle. Nawaz is also lined up to receive further compensation payments in the year ahead on top of his \u00a3700,000 annual salary.<\/p>\n
Tesco UK shop floor staff are to receive a bonus equivalent to 2% of annual salary in June. The payment comes on top of \u00a3130m paid out in bonuses last year made up of 10% extra on monthly salaries for frontline staff in April, May, June and December in recognition of the difficulties of working through the pandemic.<\/p>\n
Tesco\u2019s decision on directors\u2019 annual bonus is in contrast to action at smaller rival Morrisons where the chief executive David Potts increased his pay to \u00a34.2m last year. The supermarket\u2019s board awarded him a full annual bonus despite missing profit targets.<\/p>\n