Tesco faces a shareholder spring grilling

By DOMINIC JEFF
Published on 29/06/2012 00:00

THE “shareholder spring” will hot up again today as Tesco faces its shareholders for the first time since its shock profit warning in January.

The supermarket operator, which has been losing market share to rivals and faces escalating criticism over its unprofitable US venture, tried to defuse anger over executive pay last month when boss Philip Clarke waived his £372,000 bonus.

The firm also said its top 5,000 managers would receive a reduced annual bonus. Executive directors will receive 13.5 per cent of the maximum.

But Clarke, a former Tesco shelf stacker, still earned a £1.6 million salary in the last financial year.

Shareholder body Pirc is recommending that investors vote against the group’s remuneration report, claiming the pay policy has the potential to be “wholly excessive”. It said combined pay – including historic awards that vested and were exercised in the year – exceeded 300 per cent of executives’ salaries.

Meanwhile Tesco’s like-for-like sales slid 1.5 per cent in the 13 weeks to 26 May, despite a £1 billion turnaround plan. And the latest market share figures showed the firm’s slice of UK grocery spend fell from 31.4 per cent to 31 per cent in the three months to 10 June.

The group’s US arm, Fresh & Easy, has also been in the spotlight after an American investor group demanded an urgent evaluation of the division after five years of losses. It is seeking shareholder backing for three amendments to the annual report and accounts.