Tesco cuts base salary for top job in executive pay overhaul
Tesco, the world's third-biggest retailer, is simplifying its executive pay scheme and cutting the base salary of its chief executive as it seeks to end rows with shareholders over how it pays its leaders.
The British group, which saw 47pc of shareholders either vote against or abstain in a vote over executive pay last July, said yesterday it expected the new pay scheme would deliver broadly the same level of rewards as before.
However, it said the scheme was simpler and more focused on performance-related elements than fixed payments.
New boss Phil Clarke will receive a base salary of £1.1m (€1.25m), down from the £1.4m (€1.6m) received by his predecessor Terry Leahy, who retired in March.
"We have designed a new structure which is simpler and more collegiate, with clear strategic financial targets, delivering broadly the same levels of remuneration as before but in a better way and more aligned with the interests of our shareholders," chairman David Reid said.
Under the new scheme, four long-term incentive plans with five separate measures will be replaced by a single plan with two performance measures -- return on capital employed and earnings per share.
The number of performance measures for the annual bonus will also be cut from over 20 to seven.
Executive share options will be replaced by performance share awards, expected to be of a comparable value.
Tesco published the new plan alongside its annual report which showed Mr Leahy left the business with a total of £12m (€13.7m) from pay, awards and cashing in share options. (Reuters)