Tesco chiefs take home £1m plus

Fiona Walsh12 April 2012

Eight Tesco directors were paid more than £1 million last year, with chief executive Sir Terry Leahy receiving a 53 per cent increase, taking his total remuneration to £2.45 million.

A further seven of Sir Terry's boardroom colleagues earned seven-figure sums, according to figures revealed today in the Tesco annual report.

Total boardroom remuneration for the year was £13 million, an increase of 47 per cent on the previous year, which saw three directors paid more than £1 million.

News of the bumper pay packages comes a month after Tesco confirmed its position as Britain's biggest and most profitable retailer, with profits rising by 14 per cent to £1.2 billion, on sales of £25.8 billion.

The group also announced plans to create 21,000 jobs this year, including 9,000 in Britain.

A spokesman for the group defended the boardroom packages, saying that, in total, some 100,000 staff shared more than £200 million through profit sharing, management bonuses and save as you earn schemes last year. "We share it about," he said, adding: "We set challenging targets for long term growth and if they are achieved, then the incentives kick in. This year we achieved those very challenging targets."

The group also pointed out that the payments are made in shares, not cash.

Shopworkers' union Usdaw appeared relaxed about the boardroom packages. A spokesman said: "We are pleased that £200 million has gone to staff. Our Tesco members are in the upper quartile of earners and they also have job security because of the success of the company.

"The board's packages are a reward for success, in contrast to the rewards for failure that are often seen."

Sir Terry, 46, was paid a basic salary of £842,000 last year, plus £8,000 in profitsharing and £25,000 in benefits. Incentive schemes brought him a further £1.5 million, taking the total to £2.45 million, up from £1.6 million the previous year.

Deputy chairman David Reid saw his total package jump by 48 per cent, taking him a whisker away from the £2 million mark, at £1.99 million. Of this, his basic salary was £651,000, plus profitsharing of £8,000 and benefits of £61,000. The incentive schemes added another £1.27 million.

The third-highest paid board member was commercial and trading director John Gildersleeve, whose total package rose by 46 per cent, to £1.74 million.

New entrants to the millionaires' club are Tim Mason, marketing and e-commerce director, with £1.37 million; Andrew Higginson, finance director, with £1.31 million; Rowley Ager, company secretary, with £1.23 million; David Potts, retail director, with £1.15 million and Philip Clarke, logistics and IT director, with £1.14 million.

The Tesco directors also earned sizeable increases in their pension entitlements last year with Sir Terry, who has been with the company for 23 years, set to receive an annual pension of £331,000 a year when he retires at 60. The figure for Mr Reid is £327,000 and £334,000 for Mr Gildersleeve.

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