Investors question Tesco pay-offs to former chief

A LIVELY Tesco annual shareholder meeting today is likely to reveal sales coming under further pressure amid investor concern over its chairman and the pay-offs of its departed chief executive.

06-04-2015. Picture Michael Gillen. GRANGEMOUTH. Former Tesco store. Talbot Street. Tesco store now closed. Tesco store Grangemouth.

Shareholder body Pirc recommends that investors vote against the supermarket chain’s remuneration report at the London meeting which allowed it to hand a £1.2 million pay-off to former boss Philip Clarke – on top of £764,000 in salary until mid-January.

Clarke was given the leaving pay-off in February despite the group’s financial woes while former finance director Laurie McIlwee was also paid about £1m on leaving in addition to salary payments.

Tesco said it plans to claw back the leaving payment if it finds there was gross misconduct following the discovery of an accounting black hole.

But Pirc said: “Such service payments are particularly concerning as the track record of these two executives at the head of the company was particularly poor.”

The current chief executive Dave Lewis – who replaced Clarke in September in a bid to restore the fortunes of the supermarket giant’s core UK business – was paid £4.1m in his first six months.

Pric also opposes the group’s new chairman John Allan, who in February agreed to step down from the boards of electrical retailer Dixons Carphone and the Royal Mail to take up the post at Tesco.

He replaced Sir Richard Broadbent, who announced his resignation last October after a £263m accounting blunder involving rebates to suppliers highlighted practices going back a number of years.

However, Allan remains on the board of housebuilder Barratt Developments.