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Tesco paid new boss 4m pounds in first 6 months

Tesco paid new boss 4m pounds in first 6 months

LONDON: Britain’s biggest retailer Tesco paid new chief executive Dave Lewis 4.1 million pounds ($6.4 million) in the six months after luring him from consumer goods group Unilever and tasking him with turning around the firm.

Tesco’s annual report for the year to Feb. 28 published on Thursday showed Lewis, who succeeded the sacked Philip Clarke on Sept. 1, received salary of 570,000 pounds, benefits of 97,000 pounds, pension of 143,000 pounds and 3.32 million pounds in lieu of incentive awards he forfeited on leaving Unilever.

Last year, Tesco issued four profit warnings and was embroiled in an accounting scandal after a 263-million-pound profit overstatement in the first half of its financial year. Its shares hit a 14-year low.

Britain’s Serious Fraud Office is investigating the accounting issue which relates to Tesco’s booking of commercial income from suppliers. The Financial Reporting Council and industry watchdog, the Groceries Code Adjudicator, are also holding inquiries.

Last month, Tesco posted an annual loss of 6.4 billion pounds, one of the biggest in British corporate history, and warned investors there could be more pain to come.

Clarke’s 40-year Tesco career, three and a half as CEO, ended when he was sacked last July.

In February, Tesco made a termination payment of 1.22 million pounds to Clarke but said that should it be determined in the future that there was gross misconduct it would seek recovery of the payment.

The annual report revealed Clarke’s remuneration for the 2014-15 year was 764,000 pounds.

It also said Tesco would pay for outplacement services and legal costs in connection with Clarke’s termination of employment of up to 75,000 pounds and 10,000 pounds respectively, while he will also retain his staff discount for life.

Lewis is pursuing efficiency measures, cutting costs and selling assets to mend the group’s finances and fight back from years of declining market share and debt-rating downgrades.

The annual report proposed changes to executive remuneration for 2015-16 to better focus performance measures “on the areas that are important for shareholder value creation at this time.”

Performance measures for the annual bonus will be focused on sales, profit and individual measures, while awards from the performance share plan will be based on total shareholder return and cash generation.