Grocer Tesco has paid two departing directors a total of £3 million as CEO Philip Clarke did not receive a bonus as a result of a fall in profits, it has emerged.
Former chief of the retailer’s Fresh & Easy business in the US Tim Mason, who parted ways with the company last year amid a strategic review of its operations, was paid £1.7 million in “liquidated damages”, according to Tesco’s annual report, while former head of Tesco UK received £1.3 million to leave the business.
Mason had been with Tesco for 30 years and left last December after the supermarket giant announced the review, which ultimately led to Fresh & Easy exiting the US market, causing a £1 billion writedown.
As a result of the withdrawal, Tesco saw pre-tax profit nosedive 51.5 per cent to £1.96 billion in the year to February 23rd 2013 while the US arm reported a £169 million trading loss over the period.
No cash bonus or share award was given to the executive team due to such losses and Tesco admitted that it is unlikely that former chief Sir Terry Leahy will receive share awards of over £11 million.
Clarke, who, despite receiving no bonus this year made a salary of £1.1 million and benefits of £57,000, has had his performance criteria altered for the year ahead, with a greater significance placed on global online sales as opposed to UK like-for-like sales, though the grocer noted he will only receive a bonus if profits rise.
Yesterday, Tesco unveiled three ambitions to strengthen its societal role as it seeks to “use its scale for good” by supporting young people, tackling obesity and reducing global food waste.