// Tesco CEO Dave Lewis handed £6.42m pay package
// It is the highest annual pay packet for an exec at the grocer since Sir Terry Leahy’s exit in 2011
// Lewis is due to leave Tesco in September
Tesco chief executive Dave Lewis has been handed a £6.42 million pay package, the highest annual pay packet for an executive at the Big 4 grocer since the departure of Sir Terry Leahy in 2011.
Lewis’ total pay increased by more than a third last year due to a leap in annual and long-term bonus payouts.
He is due to exit the retail giant in September after announcing his resignation last year, and will be succeeded by Boots executive Ken Murphy.
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Lewis received a £2.4 million annual cash bonus and another £2.4 million long-term share bonus on top of £1.6 million in basic salary and benefits.
His basic salary alone is 355 times that of the lowest-paid average employee.
The pay-out is the highest sum since then-chief executive Leahy was awarded £7.1 million in 2010.
Tesco is expected to face a backlash for the multimillion-pound payouts after it was forced to defend a decision to pay a £635 million dividend to shareholders while accepting a similar-sized tax break from the government’s emergency coronavirus support package.
The long-term share bonus was boosted by £1.6 million based on Tesco’s share performance against rival retailers.
However, after the company’s remuneration committee decided to remove online grocer Ocado from the list of rivals, the share price measurement was elevated.
Had Ocado’s share performance been included, Lewis and his finance director, Alan Stewart, would have lost out on about £2.5 million in share bonuses between them.
In March, Tesco paid a £10.7 million lump sum payment to the former chief executive Philip Clarke – who stepped down in 2014 – in a settlement relating to his pension payments.
The news comes after it was revealed that Morrisons chief executive David Potts took home £4.2 million last year, including a long-term share bonus of £2.3 million.
Details of Potts’ remuneration emerged two months after Morrisons said it was deferring a decision on a special dividend amid the Covid-19 chaos.
Meanwhile, fellow Big 4 grocer Sainsbury’s has handed almost £2 million in shares to nine members of its senior team, including outgoing chief executive Mike Coupe and his successor Simon Roberts.
The executives were awarded 950,000 shares between them – worth £1.85 million – for the financial year to March.
Coupe will receive less than his allotted 239,000 in bonus shares as a result of stepping down at the end of this month.